Important update on COVID-19 for food sector businesses
The Greater Lincolnshire LEP is committed to bringing you the most relevant and important information direct from Government and supporting our business community.
Public safety is the Government’s top priority to the COVID-19 outbreak. The Government recognises that people will be concerned about the effect it will have on their businesses and employment and about reduced demand and potential disruptions to supply chains, export markets and their workforce during this unprecedented period.
Greater Lincolnshire’s agrifood industry is of national significance, with 56,000 jobs in agriculture, food processing, marketing and logistics, and it generates £3.5 billion for our economy. Greater Lincolnshire has the greatest dependence on food processing and distribution of all 38 English LEP areas.
The scale of our food industry means we have a major role in helping the country feed itself during and after the COVID-19 crisis. After the global economic crisis in 2008 the food and drink sector had the shortest recession of any major sector and we expect this will be repeated this time.
This does not mean we can be complacent, and we recognise that the next few weeks and months will be very challenging for everyone in the industry. We remain committed to helping the industry in the short and long term and stand committed to supporting our nationally important food sector.
The Chancellor announced in the Budget a £12 billion plan to provide support for public services, individuals and businesses whose finances are affected by COVID-19. This was followed up with an announcement of a further £330 billion package of guarantees to support business.
The top five issues which COVID-19 raises for the food industry are:
The food industry is a significant trade sector which has high levels of exports and imports. We are impressing on Government the need to ensure that commercial trade routes remain open, even if restrictions are placed on the movement of people.
Structural Changes in Demand
We are anticipating that sales through food service will be severely reduced in the short term, while we expect retail sales to grow. We would urge you to consider the impact this has on your supply chain and nationally we will be pushing for help to restructure the industry to cope with this short-term change. While we expect food service to rebuild after social distancing restrictions are lifted, this could take many months.
COVID-19 and the disruptions it causes have the potential to create cashflow problems for many food companies. We are calling on the Government and banks to support measures to maintain liquidity, but it is also important that all businesses continue to pay their suppliers on time so that cashflows in the food chain are maintained.
Our first priority must be to ensure staff stay safe and are supported if they become unwell. The Government has published guidance on this which we would urge everyone to follow, but we will be calling on Government to relax some rules on staffing. For example, to keep goods flowing we may need a temporary relaxation of some rules, such as driving and working hours, to enable supply chains to function when staff are ill.
Regulation, Inspection and Audit
The food chain is very dependent on auditing processes which often involve physical inspections. We would urge all Government and third-party physical inspection processes to be temporarily suspended so that site bio-security can be maintained. Similar flexibility is needed to ensure that audit processes on food safety can be completed by managers, even if the staff who normally have these responsibilities are ill.
In response to the situation we are implementing a single contact point to collate business intelligence and to assist us in feeding the needs of our business community into Government as a consolidated and impactful evidence base with a single, united voice. Please email your comments and concerns to: GLLEPBusinessIntelligence@lincolnshire.gov.uk.
The Government is also calling for any businesses currently making or able to switch production to ventilators to please call the BEIS Business Support helpline on 0300 456 3565 where a specific team is in place from 17th March 2020.
Do you agree that these are the key areas to focus on, or are there other issues you want to add?
What practical help could the government provide to help sustain the food chain during the current crisis?
Support for business
The Chancellor has set out a package of measures to support public services, people and businesses through this period of disruption caused by COVID-19.
This includes a package of measures to support businesses including:
- a statutory sick pay relief package for SMEs
- a 12-month business rates holiday for all retail, hospitality and leisure businesses in England
- small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
- the Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance
- the HMRC Time To Pay Scheme