Recommendation 18

HM Government Not Addressed

Conclusion and Recommendation 18: The hospitality and foodservice sectors may take over a year to recover from forced closure and further financial difficulties are likely. The Government should work with producers, processors and wholesalers to understand their concerns and monitor the health of food and drink suppliers, particularly SMEs, over the next 18 months as supply chains restart. In its response to this Report, the Government should include a plan for how it intends to support food and drink suppliers to the hospitality and foodservice sector during this turbulent time. (Paragraph 92) We appreciate and understand the difficulties that many producers, processors and wholesalers have experienced during the Coronavirus pandemic. The Government is also aware of the supply chain pressures which COVID-19 has caused for the producers in the farming sectors and is grateful for the hard work producers are doing to increase the supply of products to the hospitality and foodservice sectors as supply chains restart. Close working relationships with industry stakeholders have been integral to the Government’s response, enabling us to manage risks to the food supply chain caused by the pandemic. We are committed to working with producers, processors, wholesalers, retailers, hospitality and food service businesses to address their concerns and monitor the health of the food and farming industry over the next 18 months. For a specific plan for supporting food and drink suppliers to the hospitality and food service sector please see Annex A. Government is also working to support businesses experiencing increased costs and disrupted cash flow as a result of COVID-19. The Chancellor has announced over £300bn of guaranteed loans for supporting businesses to access finance. These measures include the Coronavirus Job Retention Scheme (extended to 31 October) and Bonus (to be paid out in early 2021); the Coronavirus Business Interruption Loan Schemes for small and large businesses (CBILS/CLBILS); the Bounce Back Loan Scheme for SMEs (applications open until 4 November); the Self-Employment Income Support Scheme (SEISS), for which applications are open until 19 October; and the £2bn Kickstart Scheme. The Government has also announced the Trade Credit Reinsurance Scheme, which provides £10bn of guarantees on business-to-business transactions currently supported by TCI, backdated to April 2020 and running to 31 December 2020) For food and drink businesses specifically, the Government announced a ‘bounce back’ package of measures, which specifically aims to aid SMEs through support for e-commerce and exports; as well as a VAT cut from 20% to 5% on hospitality and tourism activities (including out of home food) until January 2021, which will consequently result in improved demand for suppliers to the sector.