An Open Letter

Apr 27, 2020

Hello,

My name is Jessie Jacobs and I am a Director at Food & Drink North East (FADNE). I am a social entrepreneur with eighteen years experience in charity leadership, local and national campaigns and a former senior parliamentary researcher. I am also, Tees Valley Metro Mayoral Candidate. The future of the hospitality industry in the North East hangs on the edge of a precipice. However there is a solution that we want to shine a light on today, which could save thousands of jobs without costing the taxpayer a penny.

The food and drink sector in the North East accounts for over one million jobs. In a recent survey of businesses across the region, we found that 74% of hospitality businesses are at risk of closing in three months, with 76% of businesses stating that the pandemic is putting at least five of their employees jobs at risk.Only 8% of business owners we consulted said they would last more than six months. That is why we are working alongside the Hospitality Union to help stop these risks from becoming a reality. We would like to highlight an idea proposed by the Hospitality Union, in order to protect thousands of hospitality businesses and jobs here in the North East. We ask that you back this. We also offer our own idea for a region specific solution. 

#NationalTimeOut

Although important Government measures have been implemented, the Government now needs to go further in order to protect our industry, and our known and loved hospitality companies across the North East. Fear of COVID-19 and the long-term need for physical distancing will mean that most hospitality businesses will remain shut down even after lockdown. When businesses are finally in a position to reopen, consumer confidence in using these businesses is expected to be low. The immediate prospect of being profitable again will be low, and many will fail in the next few weeks and months. The Hospitality Union has launched an initiative that FADNE are asking you to get behind, in order to protect thousands of hospitality businesses and jobs here in the North East with no cost to taxpayers.

A proposal for a nine month #NationalTimeOut – a #NationalRentFree period for hospitality businesses, combined with a matching loan and interest payment postponement for landlords, as well as protection from covenant breach and debt security enforcement. A #NationalTimeOut, which includes a 9 month #NationalRentFree, will protect countless businesses, save millions of jobs and will not cost the taxpayer a thing. 

Regional Resilience and Innovation Fund

In addition to the measures above, FADNE believes that a regional resilience and innovation fund and support package needs to be established. Administered through Local Enterprise Partnerships and Combined Authorities and working in partnership with sector focussed trade organisations, the fund could offer tailored support for businesses to diversify where possible and reduce fixed costs. There are already some examples of food and drink companies that have found ways to diversify and move online, but this takes resource, expertise and quick turnaround times. A simple fund to introduce new technology and marketing and potentially a digital platform would enable other companies to follow suit. A regional resilience and innovation fund could be paid for through EU funds which are currently underspent or unallocated (such as unallocated ESF funds) as funds have already had strict restrictions waived through the European commission.

Why Is This important?

FADNE consulted its network of 500 food and drink businesses on likely resilience in the face of the Covid-19 crisis. 150 businesses have provided the powerful answers regarding trading confidence, the support needed, and what the future could hold for them.

● The food and drink sector accounts for over 800,000 jobs in the North East, that’s 2% of the local economy

● The average expected loss is £204,000 per business

● 76% of businesses expect the pandemic to put 5 jobs at risk

● 74% of businesses say they wouldn’t survive longer than three months

● Only 8% said they could survive more than 6 months

● Three in every twenty employees works in food and drink industry, many of which are in hospitality

● One fifth of North East small and micro business are in food and drink

● Hospitality has faced forced closures, will be the last to reopen and the last to bounce back to pre-covid trends

Further Measures

The existing Government measures, and especially the CJRS, have worked extremely well to get almost every hospitality business and millions of employees into the economic lifeboat. But this has come at great cost and these measures alone will not be enough to save most hospitality businesses. Business owners are now focused on how they can survive the next few months with little or no sales. Nobody in hospitality expects to get back to anything like normal for at least a year. They deserve our help now. The #NationalTimeOut is a plan to postpone the next 9 months of rent (01 April-31 December or three rent quarters – 25 Mar/24 Jun/29 Sep).

Like the 12 months business rates break, this #NationalRentFree should be sector specific – applying only to those businesses that have been forced to close by Government order, that will be last to reopen and that will take the longest to get back to any kind of normal – Hospitality and Leisure. To help landlords manage and bridge the cashflow gap caused by three quarters of no rent, we need to grant the same push back on the next 9 months of their loan and interest payments (where the debt is secured on premises benefiting from the #NationalRentFree). The CJRS, SBGF/RHLGF grants and business rates relief are incredibly helpful to hospitality businesses but, without a #NationalRentFree, thousands of commercial premises will soon be empty. Thank you for your time and continued support. Together we can help save thousands of jobs in the North East

Jessie Jacobs, Director at Food & Drink North East

Signed and supported by

Terry Leybourne  – 21 Group

Anna Hedworth – MD Cook House

Ken Holland – Specialist Grower

Adam Riley – MD Rileys Fish Shack

Jamie Sadler – MD Harissa

Tony Renwick – Chef

The Forge Restaurant

Dave Stone – MD of Wylam Brewery, By The River Brew Co, The Bridge Tavern, The Town Wall

Clair Carruthers – Owner, Carruthers and Kent.

David McDonald – Owner, Geordie Bangers

Alex Nietosvuori – Hjem

Bill and Anna Scantlebury – Cullercoats Brewery Ltd

Julia Austin – Director, TyneBank Brewery

Lee Renforth – Brinkburn St Brewery, Bar and Kitchen

Helen Gill – Co-Owner, Chadwicks Inn Maltby

Chris Driver – The Derry, Long Newton

Julie Evans – Chilli Cake Deli Hartlepool

Jamo Ocak – Olivelos, Middlesbrough

James Watson – Business consultant and owner of OverIce

Jay Byers – Steel River Gin company

“The pub & restaurant industry has had to adapt to changes since the financial crisis of 2007–08. The country saw the closure of many pubs and significant number of jobs lost. The hospitality industry needs as much support as possible to survive this Global Crisis. We are the lifeblood of our towns and villages”

Chris Driver, The Derry, Long Newton

Add your voice to ours and together we can make meaningful change happen!

Currently, Food and Drink North East is entirely self-funded and resourced on the goodwill of our Board and partners.

FADNE is about ownership not membership. We're a growing community of over 500 individuals, businesses and organisations who are working towards the same vision.

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Food and Drink North East
The Beacon
Westgate Road
Newcastle upon Tyne
Tyne and Wear
NE4 9PQ 

T: 0739 4522 991
E: info@fadne.org

About us

Food and Drink North East is a community interest company (CIC). We aim to build a vibrant and engaged community that champions positive trade, promotes a sustainable circular economy and acts as a collective and inclusive voice for the region’s food and drink sector. Focussed on four strategic areas, our objective is to grow the sector’s contribution to the regional economy to 10% gross added value (GVA) by 2025.

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