The Federation of Wholesale Distributors has urged the government to support public sector foodservice providers as they battle rapidly rising inflation.
The FWD pressed the government to commit to ongoing inflationary increases for public sector catering suppliers.
It also called for the creation of a ring-fenced funding pot for catering costs in order to keep up with inflation rates.
Budgets in the public sector have largely remained static, leaving wholesalers to bear the brunt of supply chain cost increases.
The budget for free school meals, for example, has increased a total of just 1.7% over the past 10 years, while inflation hit 9% in April. This has lead to warnings that caterers may be forced to use cheaper ingredients or decrease portion sizes.
“Government support for some public sector contracts, particularly free school meals, has lagged far behind inflation for years, and the recent trajectory of the increases just puts incredible pressure on distributors to maintain contracted food supply and standards,” said FWD director of communications David Visick.
“If funding fails to track inflation, both the quantity and quality of public sector food could be compromised.”
The call for support comes as wholesalers are attempting to renegotiate contracts after price negotiations have broken down.
One wholesaler that supplies the public sector told The Grocer it had managed to renegotiate pricing in line with its contractual terms.
The source said: “Although there has been obvious pushback, we have maintained good relationships thus far.”
However, The Grocer understands some wholesalers have faced the threat of losing contracts.
A Brakes spokesman told The Grocer: “The government’s support during the pandemic was vital to securing the future of many businesses and the livelihoods of people throughout our supply chain. But this moment is critical in the sector’s recovery, and the support cannot end here.”
The free school meal funding rate for the 2022/23 financial year, which is set to be published in June, will give wholesalers an indication of how seriously the issue is being taken in government.
No comments yet