WSTA comments on latest Treasury announcement on new loan scheme

Coronavirus | 27 April, 2020

Following this afternoon’s announcement that a bounce back loan scheme for small firms will be introduced, the WSTA has issued the following comment:

WSTA Chief Executive, Miles Beale, comments:

“This new support announced today by the government, whereby small businesses can apply for 100% government-backed loans amounting to 25% of turnover up to £50,000 is welcome, and may support the continued survival of businesses across the wine and spirit industry.

“However, as we have said before, much of the announced support amounts to loans which will need to be paid back. In this instance, a ceiling of £50,000 is low and the government could have gone further.

“The burden of additional debt is particularly unattractive to businesses in the supply chain who are yet to enjoy the government support afforded to other hospitality businesses in the form of grants, but for whom, just like pubs, bars and restaurants, sales have been reduced to zero practically overnight.

“We have been clear that what these businesses need is for the government to recognise their value in the same way they have other parts of the hospitality sector. It may well be the case that these businesses will be the last to be permitted to re-open, and even when they are allowed to begin trading again it is likely they will still be forced to operate at reduced capacity or be tightly restricted. This impact will be felt just as much by businesses in the supply chain.

“The government must extend business rates exemption and availability of government grants to businesses in the on-trade supply chain, by broadening its definition of hospitality to include them. This would represent a much more supportive measure.

“The government must recognise that persisting with such a narrow definition of hospitality is harmful – there will be no hospitality sector without the businesses that keep pubs, bars and restaurants stocked.”