Major Welsh food wholesaler Castell Howell issues job loss warning

One of Wales’ biggest food wholesalers, Castell Howell, has warned it is facing the possibility of making major redundancies because of the drop in sales to the hospitality sector caused by the Covid-19 lockdown.

The Carmarthenshire-based firm which employs around 700 staff, is one of the UK’s leading independent food wholesalers.

In a statement, a spokesman said: “Sadly, the effect of the pandemic on the foodservice and hospitality sector means that we have to enter into consultation with staff in relation to potential job losses.

Despite our efforts to increase sales to non-core business customers, retail/public sales and other new markets, our weekly sales are down by 65%, and it appears unlikely that trade will recover fully until well into 2021.

“Major events have been cancelled, and it is likely that our core customers such as schools, pubs, restaurants, hotels, cafés and workplace catering will not open to full capacity for several months.

“As the UK Government’s furlough scheme is due to end in October, we regrettably need to start the consultation process with our staff so that further financial losses are minimised once Government support ends.

We are unable to confirm how many jobs could be lost, as this depends on the extent to which our customers are able to resume trading while operating within social distancing rules.

“Cuts are expected to come from a combination of voluntary and compulsory redundancies and reduced hours.

“We hope that during the consultation period, more customers will have the opportunity to resume trading and that a clear plan for the sector will become apparent. This will help mitigate the total number of job losses and allow businesses to plan with a degree of certainty.

“We have to begin this safety action to protect the medium to long term viability of our business and to ensure that our role in the supply chain to key customers which include the NHS and local authorities is not compromised.”

‘Not something I thought we’d ever have to contemplate’

Castell Howell managing director Brian Jones said: “This has been a very difficult decision, and it saddens me personally as I know the concern that this consultation period will cause our employees. We will do our utmost to support them during this period.

I sincerely hope that any jobs lost in the short term will eventually be re-created as and when the hospitality sector recovers.

“After more than 30 years of building the business and trading successfully, this was certainly not something I thought we’d ever have to contemplate.

“I’d like to reassure everyone associated with our company, including our hugely loyal customer base, that taking these protective measures will ensure that Castell Howell can continue to provide the service levels for which we are renowned.”

West Wales farmer and entrepreneur, Brian Jones, who formed Castell Howell Foods in the early 1980s, has previously been recognised for his services to agriculture with the Farmers’ Union of Wales External Award for his services to agriculture.

FUW Carmarthenshire chairman Phil Jones called for the Welsh Government to intervene, warning the news would have implications for the wider agri-food sector.

“Brian has done so much for agriculture and his passion for Wales as a food destination has been second to none,” Jones said.

“His commitment to do what is good for Wales as well as His Celtic Pride brand has always been an example of that.

For the company to now face potential job losses because of Covid-19 is heartbreaking to say the least. The wider consequences for the rural economy, suppliers and staff could be drastic if no alternative can be found.

“We are hoping that this will be only a small blip in this company’s future and that they can return to normality, increase their business growth as soon as possible and re-employ not just those that may have lost their jobs but many more.

“The consequences for the foodservice industry have been devastating and sadly Castell Howell has not been exempt.

“With this in mind, we call on the Welsh Government to do all they can to assist the sector in recovering from the lockdown downturn as quickly as possible.”