The managing director of a leading dairy foods producer is calling for more help from the Government for firms struggling due to lockdown – and fears a wave of redundancies when the furlough scheme ends.
Paul Winterton, managing director at Langage Farm, wants more grants to available for companies and an extension to the furlough scheme, plus the establishment of an “open forum” for businesses to advise ministers.
He said this is vital to prevent an economic “timebomb” going off, with a potential tsunami of redundancies if Chancellor Rishi Sunak ends the Coronavirus Job Retention Scheme too early.
Mr Winterton said he is battling hard to find new markets for Langage Farm products, which include high-quality ice creams, clotted creams and yoghurt, sold in M&S and other major supermarket chains.
But with sales severely dented by the loss of small retailers and hospitality businesses, forced to close during the Covbid-19 lockdown, he needs to rebuild sales and bring 22 furloughed staff back to work without job losses.
The loss in custom has meant that instead of sending out 18 truck-loads of products a week, the Langage Farm factory is dispatching just four.
It is losing £40,000 to £50,000 in sales each week due to the restrictions, which, if it continues, will cost the firm £1.5million to £2million this year.
Mr Winterton, who has just 22 people currently working at the factory near Plymouth, said the enterprise lost vital Easter trade and he has fears for the summer if lockdown does not end soon.
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“I’m very worried,” he said. “Local business, retail and hospitality, is pretty much non-existent. Supermarkets dropped but came back again. We lost one contract with a supermarket.”
He applauded the furlough scheme, which saw workers sent home on 80% of pay, but said: “What’s going to happen in a few weeks time? Extending furlough would be a good thing, but it’s a waiting ground for redundancy.
“I furloughed 22 people. We are keeping in touch with them and sending them food hampers. I’m trying to secure new contracts. If I can do that the furlough will have been a good thing, but, if not, there could be an element of those positions that could be redundant. Furlough only gives breathing space. We could be looking at some sort of redundancy situation in the next three or four months.”
Mr Winterton said his primary concern was the virus and the tragedy it is bringing to families. But he is also worried about the effect the lockdown is having on the economy.
“It about the economic fallout,” he said. “The NHS has done a remarkable job but I’m disappointed in the Government – it should have reacted earlier with business support.”
He applauded the help ministers have given businesses so far, but feels more needs to be done, especially as he feels SMEs have been somewhat “left to their own devices”.
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He said, for example, Langage Farm had been allowed to defer its business rates payments – but they would still need paying.
He stressed loans offered under he Coronavirus Business Interruption Loan Scheme (CBILS) would also need repaying and said: “Why do we want that financial burden?
He said grants or rates reductions would be preferable and said: “There is a timebomb coming if the Government does not support business.
“They have to think about rebuilding the economy. We are talking about social welfare, educating people, giving them a reasonable lifestyle, and choices for their mental wellbeing.
“But it’s what the future looks like. The biggest risk is we don’t know what is going to happen.”
He said that some businesses will not survive and added: “Social distancing will be in place for a long time and the economy will take a long time to recover.
“Small traders are living from month to month, or week to week. How are they supposed to survive? Only by getting themselves into debt?
“Help has to be quicker and more targeted. I’m not knocking what has been done – but it is not good enough.
Mr Winterton wants an “open forum” set up with business people represented on a panel which can tell ministers what help and support industry sectors need to restart the economy.
“They (ministers) have never been faced with this challenge before and don’t know how to deal with it,” he said.
Meanwhile, Langage Farm is doing everything it can to weather the storm and is developing new products and exploring new markets.
“We have started to increase our product development capacity,” Mr Winterton said. “We are focused on new product development and will have launches in mid-summer and December. That’s new creams and ice creams. We have some exciting lines coming. We are sending examples to buyers’ home addresses.”
He said it is hoped these new products will soon be gracing thee shelves of “major supermarkets” such as M&S.
In addition management roles have changed at the plant. With so few staff able to work, everyone is pitching in and Mr Winterton said: “I’m packing ice cream, for example.
Langage Farm has also started working closely with other food industry businesses in Devon and Cornwall, finding ways to help each other out.
He predicts that when the virus abates “there will be more people speaking to each other, across different industries”.