A food distribution company has written to the First Minister warning the national “firebreak” will put jobs at risk.
Andrew Foskett, the joint chairman of Harlech Foodservice, based in Criccieth and Chester, said the firebreak, as well as the rolling local lockdowns in England, will cost his firm £2m.
Mr Foskett revealed the company had already been forced to place staff on short-time, resulting in a 40% pay cut for the workforce and the company’s directors.
The company’s main client base is the hospitality sector and the firm saw 95% of its business “fall off a cliff” during the first wave of the pandemic.
Harlech said it navigated the difficult summer months with the net loss of just one job – with 17 redundancies and 16 new roles created – after the newly-appointed managing director, David Cattrall, restructured the company and improved the online sales side of the business, as well as using the furlough scheme and a boost from the Eat Out to Help Out campaign.
The company has said it has secured a Coronavirus Business Interruption Loan (CBIL) to cover the financial hit while record summer sales will also help.
Mr Foskett is asking for an extension to the Job Retention Scheme (JRS) with companies receiving 80% of staff pay and being allowed to move staff in and out of furlough depending on demand.
He described the Job Support Scheme that replaces it as “unworkable” and of no benefit to companies like Harlech Foodservice because they were not legally being forced to shut.
Most Read
The company also believes the reduction in VAT for the hospitality sector, from 20% to 5%, should be made permanent.
It was vital, he said, that food-led pubs and restaurant that operate in a Covid-responsible way were allowed to reopen on November 9.
In the letter, Mr Foskett said: “As a result of your recent changes in legislation our business is forecast to lose in excess of £2m this autumn/winter and staff jobs are again at risk.
Sign up to the BusinessLive Wales newsletter and follow us on LinkedIn
As well as an in-depth early morning newsletter, we will be sending out regular breaking news email alerts. To sign up to this service
And, follow us on to catch the latest stories and to network with the Welsh business community.
“As an established food distributor in north and mid Wales, we have been hit hard by the Coronavirus pandemic.
“Pre-Covid we were a profitable Welsh business that employed 170 staff but, as with the majority of our hospitality customers, we are struggling going into the winter period.”
Mr Foskett said the company was looking at taking “drastic action”.
Don’t miss
“As the tapered JRS comes to an end in October, and with the unworkable Job Support Scheme that replaces it, we have had no other option but to implement a 3/5th working pattern for all our staff so we can protect jobs in the long term – that’s a 40% pay cut to all employees and directors at Harlech Foodservice. Even with this we forecast a £1m loss in the next six months.”
In the summer Castell Howell Foods was considering job losses at the 700 staff firm.
The Carmarthenshire wholesaler and processing company entered into a period of consultation with employees.