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Food wholesalers face massive losses as orders for perishable goods plunge

Concerns are growing that tens of thousands of tonnes of perishable foods may have to be destroyed as a result of lockdowns across Australia. 

The food is being held in stock by family-owned and operated food distribution businesses that supply cafes, restaurants, hotels and clubs across the three states where lockdowns are most prevalent: NSW, Victoria and SA. Because much of the food has use-by dates, the stock will have to be dumped if cafes and restaurants cannot reopen in time.  

“The closure of Australia’s hospitality scene has a trickle-down effect on our members who supply these venues,” said Richard Hinson, chairman of Independent Food Distributors Australia (IFDA) which represents hundreds of family-owned businesses. 

“Restaurants and cafes are cancelling their orders for millions of dollars worth of perishable food and other goods – in NSW, our members are reporting that revenues are down by as much as 70 per cent.”

Hinson said many cafes and restaurants are shutting indefinitely because they are “sick and tired of the stop-start nature of lockdowns”. 

He wants the Federal Government to introduce additional concessions for independent food distributors, similar to the instant asset write-off tax concessions introduced for other industries last year. 

“Small businesses that operate in the food distribution sector should have the ability to write off the cost of these perishable goods for tax purposes,” he said.

“We call on State and Federal Treasurers and Ministers for Small Business to support our request given the food distribution industry, directly and indirectly, supports tens of thousands of jobs across the country. Many of these jobs are now at risk which is a significant issue given nearly 50 per cent of food distribution warehouses are in regional and remote areas.”

While acknowledging it is difficult to create clear roadmaps given the uncertain nature of the pandemic, Hinson said that if the government could set a date for reopening of hospitality venues  – as the NSW had given the construction industry – that would help IFDA’s members.

“We appreciate it is a challenge in the current environment but clear roadmaps provide the business community with a greater ability to plan and ultimately survive the current situation. Our members operate high volume and very low margin wholesale business models, with high fixed overhead expenses”.

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