Lockdowns, inflation, staff shortages, supply shortages, rail strikes. It’s a small miracle so many foodservice wholesalers have survived these past three years, though a glance at our Big 30 ranking shows continuing evidence of the carnage, with sales at Brakes down 26% and losses of almost £450m in two years.
But it’s the smaller operators that are most vulnerable. There are hundreds of small foodservice wholesalers outside the Big 30. And they’re being snapped up, though bigger fish may soon be netted too, as the challenges mount.
So the timing of the Crown Commercial Service shakeup of government procurement for food and drink could not be much worse. With a four-year monopoly the prize, the obvious casualties of this are the myriad local and regional foodservice operators, and their numerous small suppliers, as supply will be consolidated into RDCs.
It seems such an extraordinary time to be rocking the boat, and flies in the face of the government’s so-called ‘levelling up’ agenda. And while “value for money” is the key aim, in true ‘cakeist’ fashion, it also promises to attract “more SMEs into the supply chain” and “reduce adverse environmental impacts” through centralisation. Yeah, right.
With the government’s appalling record on big procurement contracts, from Carillon to PPE, it hardly augurs well. The lack of consultation is also extraordinary. While CCS insists all due process has been adhered to, neither the Federation of Wholesale Distributors, nor the Public Sector Caterers Alliance were consulted.
It’s only a £100m contract, but if all foodservice public sector contracts take up this new framework, the FWD estimates there’s £4bn up for grabs for the lucky winner. At best, with a consultancy like Capita or Deloitte running the show, a layer of profit would be skimmed off. At worst a huge number of small operators will be taken out, as Tesco-owned Booker, South African-based Bidcorp or US firm Sysco clean up. Foodservice supply is a cottage industry of little miracles. No-one quite know how it works, but somehow it does, in good times and bad. Who in their right mind would entrust the government to run it better?