Wholesaler The Cheese Merchant has gone into administration due to cashflow issues as the hospitality sector continues to struggle in the cost-of-living crisis.
The company, which was founded by former chef George Lang in 2017 and supplied restaurants in London and the South East, was forced to close in October. In a heartfelt message sent to customers, Lang blamed cashflow problems linked to a decline in sales during Covid, bad debts caused by customers closing and big increases in energy and wage costs.
Attempts to secure new investment or a buyer were unsuccessful, before administrator KRE Corporate Recovery was appointed. The Cheese Merchant moved from Somerset to new premises at Laverstoke Park Farm in Hampshire last year and employed around 15 people.
The closure highlights how difficult trading conditions are for many cheese businesses, especially those that supply the hospitality sector, which is under severe pressure because of the cost-of-living crisis. Figures from UKHospitality in November showed that 38% of hospitality venues failed to make a profit in the fourth quarter of 2023 as people eat out less and inflation continues to impact businesses.
One cheese wholesaler, which supplies restaurants, told FFD he had seen a sharp rise in late payments in the foodservice sector, forcing him to introduce new payment terms.
“Chasing payments from restaurants has always been an issue, but things have got worse this year,” he said. “We were hit when one of our customers went into liquidation earlier this year owing us £9k, so we’re much stricter about payment now. I’m having to spend more time chasing payments and keeping on top of the books to make sure cashflow is okay. It’s very stressful.”
Another cheese wholesaler told FFD that sales to restaurants were flat this year, but when inflation was taken into account, there had been a fall in volumes. “Some restaurants don’t offer a cheese course at all anymore because cheese seems expensive compared to flour, eggs and sugar for making a dessert.”
He added that he refused to supply restaurants that demanded 60-day payment terms. “We are very strict with our bookkeeping and one of our requirements is payment within 30 days. We simply don’t supply businesses that expect longer payment terms.
This article first appeared in the December 2023 edition of Fine Food Digest.