New Government procurement plans for the public sector are potentially 'catastrophic' for smaller suppliers to the Public Sector.

According to The Gorcer, 'Public sector food provision plans ‘potentially catastrophic’ say wholesalers | News | The Grocer'. 

A single operator will be awarded a 4 year contract term for £100m supplying 14,000 food and drink products to the Public Sector. The 'Prime Supplier’ is understood to be planned as a consultancy, a consortium of businesses or an existing national wholesaler.

This could mean more regional suppliers who rely on the income from such contracts, heading into trouble which may impact on other sector catering provisions.

After the pandemic, Red Box were advocating a spread approach to purchasing, with additional suppliers being made available to contractors or in house provisions where possible. This decision, although clearly made for financial gain in Public Sector settings, will create a single source of entry, where a national supplier will become a monopoly within the market place, pushing smaller operators out.

“It’s extraordinary that CCS has gone this far without consulting the companies that keep the public sector fed and watered,” said FWD CEO James Bielby. “It has shown a basic misunderstanding of the complexity of public sector contact fulfilment, and of distribution to thousands of outlets with individual needs.

“There is currently a diverse landscape of businesses supplying the public sector, where regional SMEs and larger wholesalers happily coexist. The creation of this scheme raises a very real danger that SMEs could find themselves excluded, and their customer knowledge and distribution expertise will be lost.

“Public sector food distribution is not a ‘one-size-fits-all’ supply chain. Regional and specialist wholesalers bring invaluable efficiencies and experience. We believe there should be a fair environment which reflects the diversity of the sector and supports growth for businesses of all sizes.

“Since 2010, the government has consistently underfunded the public sector food supply chain, and from what we have seen of the CCS framework, this is not way to improve the service. Delivery of nutritious, cost-efficient food and drink to schools, hospitals and other local authority contracts is best maintained by realistic investment in the current structure.”

Watch this space.