Written evidence submitted by Brakes UK (COV0076)
- We welcome the opportunity to submit written evidence to the EFRA Committee as part of its inquiry into COVID-19 and food supply.
- Brakes is the leading foodservice wholesaler in the UK, serving more than 30,000 customers across all sectors including: care (NHS, care homes etc); schools; pubs and restaurants; and business and industry.
- We focus on providing award-winning food and service, with the most extensive range in foodservice featuring fresh, chilled, ambient & frozen products. We have a British-first sourcing policy, which means that provided it is in season and available we will try to source British products, which also helps support the rural economy.
- Across Great Britain, we employ more than 6,500 colleagues across a national infrastructure of 28 depots and associated sites, which enables Brakes to serve and reach even the remotest parts of the country. Brakes is part of Sysco, the world’s largest foodservice company.
Have the measures announced by the Government to mitigate the disruptions to the food supply chain caused by the pandemic been proportionate, effective and timely
- While Brakes welcomes many of the measures that have been introduced by the Government, the almost overnight closure of the hospitality sector caused significant issues to Brakes, its customers and suppliers. The speed of lockdown implementation gave very little preparation time, so the impact was absolute. Wholesalers fixed costs remained, with a vastly reduced income as demand disappeared, adversely impacting cashflow, profitability and massively increasing waste, while at the same time making wholesalers’ vehicle fleet largely redundant.
- We understand the reasons for the lockdown and, of course, fully support these in the national interest. However, wholesalers, suppliers and customers all need to carry stock to ensure that we fulfil orders and Brakes was left with (multi-million £s) of short shelf-life product with little alternative than to provide to charities or in the worst cases dispose of it in the most effective manner possible. Brakes prides itself on its CSR commitments, and therefore to see this level of waste, some of which will inevitably be unable to be repurposed, is incredibly disappointing. The problem does not stop there. In the first stages it was fresh and chilled product waste, but we are now facing issues with short-life on frozen and ambient lines too, and we will be battling this for the rest of the year even if the market re-opens quickly.
Product in the supply chain
- We believe that more support was needed to recognise the immediacy of that impact – and the overnight transfer of the consumer demand from the £10bn hospitality sector to an unprepared retail sector, and this created issues across the food & drink industry. Due to a number of market and supply chain factors, it was impossible for retail to absorb this volume, while the wholesale sector was left idle, with rotting products and a redundant vehicle fleet. Despite the empty supermarket shelves, the food was always available in the broader supply chain, it was simply in the wrong place. This required a quicker, more cohesive and effective solution to bring the wholesale supply chain into retail outlets.
Transport and collaboration
- We applaud many of the other initiatives which have helped to create a more cohesive supply chain, for example the relaxation of competition law to allow sector businesses to work more collaboratively to aid the national endeavour. We also welcomed the changes to drivers’ hours and the support package for key transport routes, in particular to allow the free flow of goods, although we are aware of some concerns from international drivers that measures in their own countries would affect them on their return journeys. Within transport, rules on MOTs and drivers’ licences also help, although it needs to be recognised that individual businesses should not see this as in anyway removing the need for safety to remain paramount.
- We also welcome the Job Retention Scheme, which has helped us to part-mitigate the potential for job losses. With volumes down 75%, our usual drop efficiency has been completely compromised, so serving the 25% of demand has been manifestly more expensive impacting profitability. Going forwards, it is crucial for the future of the hospitality and wholesale sectors that the Job Retention Scheme be extended to beyond the release from lockdown. As long as there are social distancing measures in place the likelihood is that particularly the hospitality sector (including hotels, restaurants, pubs) will take much longer to recover. Failure to extend the Job Retention Scheme will put many thousands of jobs at risk.
- The Key Worker definition and the support that it gives parents, especially by allowing them the opportunity to send children to school should they need to, has been a valuable resource, removing a barrier to work, particularly in the early stages when employee sickness levels were higher.
PPE and testing
- While we recognise the initial need to prioritise testing for NHS and front-line staff, availability of testing for key workers at an earlier stage would have been helpful, especially at the beginning when concern over the virus saw many colleagues self-isolating, and our customers, particularly in the education and care sectors, were seeking reassurance that our delivery drivers were free of the virus.
- Brakes was also concerned about confusion over PPE. There have been many conflicting points of view across Government and its scientific advisors causing employee concern and stress, and has increased sickness levels as some believe that it is not safe to come to work. Clearer, quicker and consistent guidance and protocols would have been welcomed as a reassurance, particularly to our front line drivers.
Are the Government and food industry doing enough to support people to access sufficient healthy food; are any groups not having their needs met? If not, what further steps should the Government and food industry take?
- In the initial phases of the lockdown, many retail shelves were devoid of fresh foods, along with certain types of products such as pasta, rice and beans, many of which were impacted through issues in the international supply chain. In many cases, wholesalers had large stocks of these products and while some of the canned or packets may have been larger than many consumers are used to, our success with selling certain products through major retailers showed that there could have been a market for larger pack sizes - greater collaboration and guidance from Government would have assisted the industry.
Supporting vulnerable people
- The Government should be commended for identifying and contracting the UK’s two biggest wholesalers to make use of their supply chains to support the clinically vulnerable. Brakes, along with fellow foodservice wholesaler Bidfood, is currently delivering hundreds of thousands of food care packages for the clinically vulnerable, a service which was conceived, sourced and delivered within nine days. This Government-backed scheme delivers a nutritionally-balanced box to those clinically vulnerable consumers who request it. While there have been some challenges over the efficacy of the accuracy of the data to identify the vulnerable, we believe that this has been a valuable scheme and Brakes is very proud to have been a part of it.
- It is clear that there is an ongoing issue with delivery capacity and getting food to other vulnerable people. It is disappointing that more consideration was not given to how wholesalers can support the broader effort to feed the nation. While we welcome the retailers’ efforts to increase their capacity for home delivery and click and collect, this is an area where wholesalers could have provided more support. The experience that we have in delivering food packages to the clinically vulnerable shows that wholesalers can transfer seamlessly from a B2B environment to B2C.
- In an unprecedented crisis where normal crisis procedures are not adequate, instead, requiring innovative solutions – wholesalers, including Brakes have successfully launched their own click and collect and delivery services, but more could have been achieved, particularly with vulnerable, self-isolating people if the process had been co-ordinated with better use of wholesale capacity and not assumed to be the sole premise of retailers.
- While Brakes has maintained availability of products, the shutdown of parts of the foodservice sector has meant that access to healthy food may have been restricted. Specifically, school meals serve as an important and nutritionally balanced part of a child’s diet and are particularly important for vulnerable children who receive free school meals. When schools are closed, many children may have reduced access to healthy meals. The response to the free school meals issue was slower than it should have been, and we believe that the voucher scheme, providing money to spend in supermarkets, may not necessarily be spent in a nutritionally balanced way. Brakes expertise in providing nutritionally balanced food for children could have been utilised to deliver a service similar to that being undertaken to support the clinically vulnerable.
- The charity that Brakes started, Meals & More, to support families in danger of holiday hunger has been unable to support holiday clubs, due to social distancing, and is currently helping provide food packs to families in need. We anticipate increased demand for this, while the current lockdown continues. Last year we provided more than 200,000 meals to vulnerable children and have concerns about how we will meet this demand in 2020.
What further impacts could the current pandemic have on the food supply chain, or individual elements of it, in the short to medium-term and what steps do industry, consumers and the Government need to take to mitigate them?
- We have concerns over a number of short to medium-term issues. Key to this is the level of uncertainty – while business can plan for various contingencies, without a clear plan of action from the Government, restarting the supply chain for the hospitality industry will be difficult. This cannot happen overnight and therefore we would like to see practical guidance in this area.
- Restarting the supply chain is far more complex, than simply stopping it. There will be less crop and protein availability, and the industry will need time and transparency on the opening schedule to prepare. Furloughed staff will need to be brought back, offices and warehouses re-opened. Debt issues will need to be addressed before new orders are placed.
End of lockdown
- Once hospitality reopens, there is likely to be pressure to deliver quickly. Clarity over policies, such as social distancing and mitigation requirements, for as an example, double manning delivery vehicles, are necessary. When and how the hospitality sector is allowed to reopen, what social distancing measures will be required in restaurants, pubs, hotels etc, and what impact that will have on demand volume from the sector is also critical. In short, an effective food supply chain requires meticulous and early planning, and a clear understanding of the impact to demand volumes. Partial opening of outlets will put a huge financial burden on wholesalers that many will not be able to cope with as the economics of wholesale, for both customers and wholesalers, rely on high levels of efficiency.
- There also needs to be careful consideration and considerable advanced warning of the return of schools, including any envisaged phasing. Supplying food for schools is a huge undertaking that requires considerable capacity at Brakes and other distributors, so significant lead-time will be required across the industry to reopen sites, stock up and make necessary plans (that could be very different to the way we supplied schools pre-COVID). This will also require cooperation to understand which wholesalers will be available to support school re-openings. A phased opening in schools will also result in cost and resource challenges, as usual delivery efficiencies will not be available.
- Lessons can be learned from other countries who are further down the pandemic crisis timeline. For example, in Italy, there is discussion about the possibility of restaurants opening from 1st June, to allow time for planning.
- Government-backed research regarding anticipated consumer behaviour as well as information about the experiences of other countries following the release from lockdown would also be useful to identify how consumers may react. Will consumers, for example, go out or not and if so where and how often?
- Brakes also has concerns about the potential for reinfection, particularly if we restock and then face another full or partial lockdown, which will have significant impact on the foodservice wholesale industry. In this case, we would like to see PPE given due priority for key workers in the food industry.
- Wholesalers have already stocked up to full capacity for two potential no-deal Brexits. We have major concerns that having to plan for the risk of another no-deal Brexit, combined with the uncertainty we face over exit from lockdown and how the pandemic may develop will have huge consequences for the industry. The potential costs, at a time where huge stress has already been placed in the industry, could have a negative impact on some wholesalers
How effectively has the Government worked with businesses and NGOs to share information on disruptions to the supply chain and other problems, and to develop and implement solutions? How effectively have these actions been communicated to the public?
- With other industry partners, Brakes has participated in daily calls with DEFRA, which has been useful in co-ordinating and discussing the issues that are affecting the industry. We believe that this has helped the industry work together. We also receive timely and useful feedback from our industry organisations, where it is clear that they are continuing to have a useful and ongoing dialogue with relevant Government departments.
- Much of the initial content discussed with the public was around health and science and it would have been useful to have sought and shared clear advice around food and the supply chain.