Official Report 953KB pdf
The final item of business is a members’ business debate on motion S6M-13436, in the name of Gordon MacDonald, on the importance of the Scottish wholesale sector. The debate will be concluded without any question being put.
Motion debated,
That the Parliament recognises what it considers to be the vital importance of the Scottish wholesale sector; understands that it contributes over £4.3 billion in gross value added (GVA) to the Scottish economy, providing over 35,000 businesses and consumers, including in the Edinburgh Pentlands constituency, with an extensive product range consisting of tens of thousands, with potentially the largest wholesale choice and selection of food and drink of any European country, and supporting over 6,000 local jobs, and welcomes the support from 30 wholesale local food champions that have supported 130 local producers, resulting, it understands, in 30% of wholesalers’ turnover coming from Scottish products.
17:15
I thank members on all sides of the chamber who supported my motion in order that it could be debated tonight. I refer members to my entry in the register of members’ interests, as I am the convener of the cross-party group on independent convenience stores, of which the Scottish Wholesale Association has been a member since the CPG was formed. I also thank, from the Scottish Wholesale Association, Colin Smith, who is in the public gallery tonight, and Jayne Swanson for their knowledge and guidance on the vital role that the wholesale sector plays across Scotland.
The Scottish Wholesale Association is a not-for-profit membership organisation based in Edinburgh. It was established in 1920 and is the official trade body that represents food and drink wholesalers and distributors. Wholesale members of the association are located the length and breadth of Scotland, and they include single-depot, family-owned businesses as well as national wholesale groups. Members supply products to Scotland’s 5,000 independent convenience stores and its 30,000 catering, hospitality, tourism and leisure businesses, as well as to all other public sector establishments.
The Scottish wholesale sector is a vital part of the Scottish economy: it is worth about £3.3 billion in the wholesale marketplace and directly employs more than 6,000 people. Wholesalers across all parts of Scotland support more than 49,000 local jobs in the independent convenience store sector. Those local jobs help local people into work, from a first job for a young person to a job for an older person who is returning to work.
The economy benefits from people shopping local and buying local produce, because producers and retailers not only provide jobs in their businesses but support employment across the town or city in which they are located, through the use of local tradesmen, produce suppliers, shop fitters and garages, as well as local legal and accountancy firms.
The link between wholesalers and local convenience stores is not always clear, but members will recognise the trading names, which include Mace, Spar, Londis, Costcutter, Premier Store and Nisa, to name but a few. Those symbol groups and cash-and-carry operations support family-owned stores to compete with the large multinational supermarkets in many of our towns, villages and neighbourhood centres.
However, wholesalers face not only competition from supermarkets but other challenges such as the restructuring of the grocery market, with the market being impacted by Amazon moving into selling groceries, wholesaler bypass, changing customer demands, Brexit and regulation. That is all happening at the same time as the wholesale sector is facing low margins, recruitment issues and rising food costs. The result is a lack of private investment, due to low investor confidence in the sector, at a time when there should be investment in operational efficiency and supply chain management.
I recently visited Mark Murphy Ltd, which is part of Dole foodservice, at its warehouse in Bankhead Way in my constituency. It is Scotland’s largest fresh produce supplier to the hospitality sector and is among my constituency’s biggest employers, with approximately 270 members of staff.
I met general manager Brian Breslin, who outlined to me not only the positive contribution that the company makes to fresh produce supply across Scotland, as the United Kingdom’s foodservice supplier of the year for 2023, but the challenges that the business faces, predominantly in the recruitment and retention of staff. Despite offering rates above the minimum wage, as well as fixed shifts and permanent contracts, it continues to struggle to fill positions, given the employment situation in Edinburgh.
That was reflected in the results of the Scottish Wholesale Association’s recent wholesale market survey, which indicated that recruitment and skill shortages remain a problem. However, the industry is trying to address that by taking steps to improve working conditions, including by introducing the real living wage and a four-day week. The sector has received and continues to receive, both during and after the pandemic, financial support from the Scottish Government totalling approximately £20 million, as the Scottish Government recognises the vital role that the sector plays for our food and drink suppliers and for us as consumers.
In 2021, the Scottish Wholesale Association launched its delivering growth through wholesale training initiative, with the aim of educating and engaging with producers to highlight the opportunities that the wholesale sector provides. The training programmes were designed by the SWA in conjunction with the Scottish Agricultural Organisation Society and Scotland Food & Drink. Supported by the Scottish Government, the initiative equips local Scottish producers with the insight and strategies that are needed to successfully navigate the Scottish wholesale landscape. The result to date is that almost 150 Scottish producers have gone through the course, with 230 new Scottish product listings via 59 wholesale partnerships.
Furthermore, the Scottish Wholesale Association has launched two additional initiatives, with support from the Scottish Government as part of its wider “Local Food for Everyone: Our Journey” strategy. The first initiative is a wholesale local food champion training programme, which was introduced in 2023. The local food champion programme is an extension of the SWA’s delivering growth through wholesale producer initiative. The programme provides training to those who work in wholesale businesses to equip them with the knowledge that they need to take responsibility for shaping their company’s local sourcing strategy. By becoming a champion, of which there will be 40 by November this year, they are taking an active role in creating a strong and sustainable local food and drink supply chain.
The second initiative is the Scottish wholesale local food and drink growth fund, which is worth £195,000, thanks again to Scottish Government funding. That is the third phase of the delivering growth through wholesale local sourcing programme that I mentioned earlier. Again, through working with partners, the initiative has been set up to support wholesalers who work closely with local Scottish producers, manufacturers, local authorities and other stakeholders to increase the volume and customer base of Scottish produce that is sold through the wholesale channel.
In closing, I highlight some of the findings of the Scottish Wholesale Association’s recent market survey. There has been positive growth in the sector in 2023 in comparison with 2022, with an average of a 5 per cent increase in turnover. Wholesale service is up by 9 per cent in comparison with 6 per cent in the rest of the UK, and there has been a very positive 30 per cent increase in turnover from Scottish products, thanks to initiatives that are funded by the Scottish Government and delivered by the Scottish Wholesale Association.
I put on record my thanks to the Scottish Wholesale Association for its collaborative approach in working with the Government and industry to ensure that the sector is nurtured and supported for all stakeholders.
17:23
I thank Gordon MacDonald for bringing the debate to the chamber in recognition of the importance of the Scottish wholesale sector. As I am no stranger to the joys of food and drink, it is a privilege to celebrate the good work of the wholesale sector in Scotland and the vital role that it plays in our food and drink supply chain.
The role of the wholesale sector in our day-to-day lives might go largely unnoticed by most, but the very quiet efficiency with which it runs is cause for recognition. The Scottish Wholesale Association describes wholesalers as
“the wheels of Scotland’s food and drink industry”,
providing vital connections between suppliers and end users such as retailers, hotels, restaurants, schools and other public sector organisations. The industry supports a wide range of jobs, from roles in delivery, production and manufacturing right up to those in procurement, administration and management. Scotland’s wholesale marketplace is now worth up to £3.3 billion, and it directly employs 6,500 people.
Most members in the chamber will have benefited from today’s wholesale industry, whether it be from picking up a pint of milk from a local corner shop when they were in a hurry, or having a quick lunch in a work canteen or a special dinner when eating out at a pub. It is inevitable that our lives are quietly but consistently touched by wholesaling.
I can name many wholesalers in my Kirkcaldy constituency that provide employment that drives the local and national economies. Chief among them has to be Fife Creamery, which, like 90 per cent of Scottish-owned wholesalers, is a small to medium-sized enterprise with strong connections with its local community. Founded in 1957 by former dairyman John Simpson, the company offers a selection of chilled dairy products. It is now a modern, thriving wholesale business that employs 160 people and claims an impressive turnover.
Such success creates a ripple effect through the food sector. In 2019, I was honoured to attend the opening of a training centre on Fife Creamery’s site, where I was joined by the then Minister for Rural Affairs, Mairi Gougeon. The space is a multi-use hub that is dedicated to connecting food producers with end-user buyers in a variety of ways. The wholesaler is leading the way in building up its business, supporting other businesses to grow and acting as a central hub for food service businesses throughout my constituency. One of the most impressive results of the new centre is a food innovation hub run by the creamery. It aims to identify new innovative products and support producers who might otherwise struggle to get their products to customers. As a case in point, it recently facilitated the launch of an ice cream for dogs, the idea for which came off the back of a recent discussion session. As the owner of Holyrood’s dog of the year for 2023, I can say that Buster and I are both intrigued and delighted by that.
In all seriousness, Scottish wholesalers are the backbone of our food and drink industry. They act as the nation’s larder, ensuring the security of food provision across the length and breadth of Scotland. The Scottish Wholesale Association recently commissioned a survey of its members, the results of which showed various stress points across the industry. Notable concerns included economic strain due to Brexit and other wider geopolitical disruptions, as well as the availability and cost of products and packaging from suppliers. All that is against the backdrop of inflation and a reported increase in regulatory and domestic policy pressures. Added to that are the increasing energy costs that have caused economic havoc across all sectors. The survey therefore pointed to clear issues of concern for wholesalers.
It is important that the sector is celebrated and listened to. I again thank Gordon MacDonald for highlighting the issue. Whether it be through our local shops, food services, businesses or pubs, we all rely on the success of wholesaling. I take this moment to express my appreciation for the Scottish wholesaling sector and to highlight the success of wholesalers in my constituency. We would all be worse off if the sector were not as strong as it is, and we would do well to support its continued success. The Scottish Wholesale Association’s outlining of its members’ concerns represents a welcome first step towards considering how we can support wholesalers across Scotland so that our strong and vibrant food and drink network can continue to flourish.
17:28
I, too, congratulate Gordon MacDonald on securing parliamentary time so that we can recognise the importance of the Scottish wholesale sector. It is so often the forgotten link in the chain when it comes to the food and drink that ends up on our tables.
During the Covid pandemic, the industry came to my notice when Braehead Foods, a wholesaler in my region, came to me for help. Its then managing director explained to me that it ordered in advance sometimes as much as £100,000-worth of stock. Along came the lockdown, with little notice, which meant that much of that product could not be delivered to retailers. However, it did not go to waste. The wholesaler donated the food to charities, which was great, but it was still hundreds of thousands of pounds out of pocket. Unfortunately, it was part of a sector that was not initially covered by the furlough scheme.
As Gordon MacDonald indicated, some 35,000 businesses rely on wholesale suppliers. Without wholesalers, the supply chain would collapse. They are the unseen and perhaps unheralded link between producers and retailers. I urgently brought the issue to the attention of the Cabinet Secretary for Finance, who, to her credit, immediately recognised the gap and the key role that wholesalers play in the supply chain. She allocated £20 million to the sector to ensure that it was robust throughout the Covid pandemic and beyond.
Without the wholesale sector, producers would not be able to get their produce to market and retailers would be without suppliers. I have had the pleasure of visiting Braehead Foods many times to see the crucial role that it plays in the food and drink supply chain. I give it a big shout-out, because it supplies not only retailers across the country but premiership football clubs here in Scotland and also clubs south of the border such as Tottenham and Chelsea.
Our world-class producers do their thing, and our retailers present those world-class products to the public. The glue in the middle is our wholesalers, who ensure that there are buyers for our producers and suppliers to those retailers. They form an essential sector that is so often forgotten. I again thank Gordon MacDonald for bringing the debate to the chamber to highlight the huge success of our wholesale sector in keeping the supply chain moving.
17:30
I congratulate Gordon MacDonald on bringing the debate to the chamber. It is great to have the opportunity to pay tribute to an industry that employs so many and contributes so much to the Scottish economy.
The wholesale sector has shown much resilience in recent years, in responding to the challenges from the pandemic that have affected supply chains and, more recently, in navigating inflationary pressures. If we are to kick-start the growth of Scotland’s economy and promote the food and drink sector globally, the wholesale industry has a vital role to play.
The motion mentions £4.3 billion in gross value added, to which Edinburgh and Lothian contribute considerably. Edinburgh has up to 30,000 jobs in wholesale and retail, with wholesalers in meat, fish, bathroom products, beer, wine and shortbread, selling all those things to other local businesses. The wholesale sector has a large role to play in the promotion of local food and produce. I welcome the work of the Scottish Wholesale Association—I know that Gordon Macdonald has met its representatives recently—to boost local food producers, in particular through its local food and drink growth fund. That fund aims to increase the turnover of Scottish produce that is sold through Scottish wholesalers to 35 per cent, by supporting wholesalers in working closely with Scottish producers and manufacturers.
I also note the SWA’s delivering growth through wholesale scheme, which works to improve the understanding of the opportunities that the wholesale sector brings. Through wholesale, local food producers have the opportunity to bring their products to a wider audience, increasing their sales and providing more opportunities for growth.
It is positive that 30 per cent of Scottish wholesalers’ turnover is currently coming from Scottish products, as that money is being reinvested in the Scottish economy. I hope that that number will grow, but more needs to be done. There is great potential in the food and drink sector to drive economic growth and tourism. As part of brand Scotland, we should be doing all that we can to use our food and drink sector to promote Scotland as a global destination for premium products. Scotland leads the UK in food and drink product exports with salmon and whisky, and other Scottish products can be brought to the same level. The wholesale sector can play a role in that through selling local products, either at home or internationally. We need to ensure that we recognise the current value of the wholesale sector to the economy while, equally, recognising the sector’s great potential in promoting local food and drink.
17:34
I add my thanks to Gordon MacDonald; I think that we all recognise the hard work that he puts into advocating on behalf of the wholesale sector and the retail sector, both in the chamber and beyond. I, too, welcome the opportunity to offer recognition—richly deserved, I think—of the importance of the Scottish wholesale sector and the central role that it plays in the Scottish economy.
It is also important, however, that, in recognising that economic contribution, both local and national, we acknowledge some of the challenges, to which colleagues have referred, that the sector has faced and continues to face, especially in the wake of the Covid-19 pandemic. Indeed, the pandemic, as it has done in many other respects, brought home to MSPs—certainly to me and, I suspect, to many others—how integral wholesalers are in the communities that we represent. Gordon MacDonald referred to the multiplier effect that wholesalers have, and other members described how wholesalers sit almost at the centre of a web.
Brian Whittle talked about the representations that he made throughout the Covid pandemic and his experience of engaging with local wholesalers, probably for the first time. I would probably take exception to him claiming the entire credit for the fact that £20 million was delivered to the sector, but I recognise his point about the pandemic bringing home to many of us what wholesalers do.
In my Orkney constituency, I was indebted to people such as James Leonard at the Stromness-based wholesalers James Wilson for the insights that he was able to provide about what was and was not working in getting vital goods to where they needed to be in the network of local shops, which came into their own during the pandemic. He was also able to explain the role that James Wilson played in ensuring that local schools, care homes and staff and patients at Balfour hospital had the food and other goods that they needed during that difficult period.
This weekend, the Scottish Parliament will mark its 25th anniversary in the presence of local heroes from around the country. I would argue that many in our wholesale sector fall firmly into that category.
As so many others do, wholesalers have to adapt to island circumstances. In Orkney, for example, wholesalers regularly and routinely hold twice the stock levels of their mainland counterparts. We are invariably at the end of supply chains. Given the transport and logistical challenges that we face and the risks that are posed to local residents and businesses in the event of ferry disruption, for example, island wholesalers have had to adapt and build in more headroom. In turn, that involves more costs and risk. It is therefore no surprise that wholesalers such as James Wilson and JW Gray find themselves operating on tighter profit margins than their counterparts on the Scottish mainland.
Increased procurement costs, third-party haulage charges and fuel surcharges all add to the pressure on island wholesalers, which seek to insulate customers and ensure that, as far as possible, stable and fair pricing levels have an impact on those margins. In that regard, I urge the minister to pay particular attention to the island-specific challenges for procurement and operation costs. I certainly argue that those challenges should be reflected in the provision of financial resources and support. When we add to all that the difficulties with staff recruitment and retention that are linked to traditionally low levels of unemployment in places such as Orkney, it is clear that island wholesalers need to be considered slightly differently by the Scottish Government and at the UK level.
That said, and perhaps to finish on a more upbeat note, I welcome some of the reports of stronger growth in recent times and the fact that the sector appears to be performing slightly better than its counterparts elsewhere in the UK.
On the sector’s efforts to reduce emissions and achieve our net zero ambitions, I was encouraged to hear about the UK-wide wholesale road map to net zero by 2040. The SWA has identified that the leading source of emissions in the Scottish sector relates to the use of heavy goods vehicles and electricity and fuel to heat buildings. At the local level, the wholesale sector in Orkney has committed to decarbonising heating systems and reducing energy costs through microgeneration, although those efforts have not been helped by capacity constraints on the local grid, reducing the efficiency of solar power-based energy systems and the associated savings on energy costs of as much as 75 per cent. Again, the Scottish Government might be able to assist in that regard.
I thank Gordon MacDonald for allowing this debate to take place and again put on the record my thanks to those in the wholesale sector for the vital work that they do in my community and in communities around the country.
17:38
I thank Gordon MacDonald for securing the debate and for all the work that he does with the grocery sector. He works incredibly hard. I also thank colleagues across the chamber for their valuable and positive contributions.
I say this with all sincerity: it is a good debate to have, because the wholesale sector is a good-news story. However, as Brian Whittle said, it is very much a sector that flies under the radar. It is an unsung, unrecognised hero of our fabulous food and drink sector, so it is absolutely right that the Parliament comes together to acknowledge the significant role that wholesalers play in our national food and drink supply chain and in food resilience.
I will also add my own personal bit. There is a company called Fáilte Foods. During my days doing festival catering, we could be working enormously long days—for 12, 14 or 16 hours a day—and we could phone Fáilte up at any time, change the order and Fáilte would deliver it at 2 or 3 o’clock in the morning. That epitomises the level of customer service across the wholesale sector, so I wanted to put that on the record. It is a fantastic sector.
If members will pardon the pun, when it comes to linking up the food and drink sector, our wholesalers are the oil in the wheels, ensuring that in all corners of the country, from the Borders to the Highlands and the Islands, the sector is kept moving and is interlinked. This vital service is very much needed. Liam McArthur made the point about having a rural and islands lens, and, as he said, there are very different challenges on the islands that we must be cognisant of.
I hope that the industry understands that the Scottish Government holds the sector in extremely high regard. That is why we have developed a strong collaborative partnership with the Scottish Wholesale Association. I am delighted to see Colin Smith sitting in the public gallery tonight. It is a partnership that has seen the delivery of a number of programmes over recent years, most notably to support the sector when it was most severely impacted by the closure of the wholesale marketplace during the pandemic, as a number of colleagues have mentioned. Working hand in glove with the Scottish Wholesale Association, we were able to provide support to affected businesses the length and breadth of Scotland through the Scottish wholesale food and drink resilience fund. That critical intervention, which was introduced by my colleague Fergus Ewing, was a vital lifeline to many businesses, and it certainly helped to maintain resilience in a time of great uncertainty. There was a £10.2 million intervention over two lockdowns, and we were the only country in the UK to give that sector such funding. That is another vital point to put on the record.
The collaboration continues to this day, and it is helping us to distribute and grow Scotland’s plentiful food and drink resources, from local farmers and producers to some of Scotland’s largest manufacturers. As my colleague Gordon MacDonald said, we continue our commitment to the wholesale sector through on-going funding for the third year of the Scottish Wholesale Association’s delivering growth through wholesale programme. Gordon MacDonald has already outlined what that does. Phase 2 of the programme saw the successful delivery of the wholesale local food programme. Those champions are collectively taking responsibility for shaping the local sourcing strategy in their businesses and are helping to increase wholesaler purchasing of local produce. Clearly, everyone who knows me knows that that is an aim that is very close to my heart.
Alongside the dedicated one-to-one training seminars, the programme also linked champions with regional food groups and meet-the-buyer events. Those initiatives are critical to the success of other Scottish Government investments in the local food supply chain, including the Scottish Grocers Federation’s go local programme and the food and drink industry strategy, “Sustaining Scotland. Supplying the World”.
With my connectivity hat on, I will quickly mention the role that the wholesale sector has played in the transition to net zero, which Liam McArthur also touched on. Through the Scottish Wholesale Association, the sector has developed decarbonisation reports, baselined its members’ emissions and created route maps to net zero. It has used that deep knowledge to shape Scotland’s heavy goods vehicle decarbonisation pathway, which launched in March. It is also working collaboratively with other sectors of the food and drink supply chain to share best practice and knowledge.
I put on record my thanks to all the wholesalers across the country for their work and for their commitment to the Scottish food and drink sector and to all the businesses that are playing a huge and often undervalued part in ensuring that we have a food and drink industry that we can be proud of—and it is right that we should be proud of it.
I look forward to continuing to work closely with wholesalers to create a strong, sustainable local food and drink supply chain for years to come. After all, it is an industry that combines commitment, enthusiasm and professionalism with delivery, innovation and success, with food and drink products that are renowned the world over.
That concludes the debate.
Meeting closed at 17:44.Air ais
Decision Time