The ability for manufacturers in the food and drink industry to identify products or services that are required or beneficial during this pandemic is crucial. One of the best examples of this is distilleries all over the UK changing tact and either helping to produce hand sanitisers or supply denatured alcohol to other producers. The Scottish Whisky Association was one of the first to be given approval from regulators to produce the cleanser from denatured alcohol whilst working closely with the Government and relevant authorities. Producers and manufacturers in the industry are now being called upon to submit details to a Government portal which connects distillers with those who can provide key ingredients and supplies such as bottles, pump action closures and companies that can assist in the distribution of the sanitisers to organisations in desperate need of the product.

Aware of the demand for these types of products, HMRC has agreed to prioritise applications for the industrial production of denatured alcohol (IDA) and Trade Specific Denatured Alcohol (TSDA1) used in the manufacture of sanitising hand gel, with approval to be granted within 5 days instead of the previous 45 day timeline.

Although it is appreciated that such alternative activities will not generate the same turnover that companies are used to, the money generated helps to aid the longevity of the company's available runway term which ultimately supports the financial health of the company. Additionally, all income aside, companies adjusting to assist in alternative markets are playing an important role in this pandemic with factories and production ready and waiting to be utilised. The public will remember those companies who played their part in helping overcome this pandemic.

Additionally, large drinks companies are collaborating with their smaller counterparts. Diageo announced in March that it was implementing various schemes to help support the British drinks trade during the COVID-19 crisis. Anyone working in the drinks trade will be given the opportunity to attend an online complimentary Diageo Bar Academy Training course. Training includes topics such as the 'business of bar tending" which aims to provide practical advice to small businesses in the absence of trading. Additionally, Bacardi is running a campaign called #RaiseYourSpirits where it has partnered with Deliveroo Editions to enable bars in the UK and Ireland to deliver cocktails during the crisis. Smaller drinks companies can also get involved in these opportunities which may enhance the experience within their own establishments and up skill their staff whilst also helping create useful business development links during downtime.

If you are in the industry and are looking to appropriately plan or potentially remodel, ask yourselves the following six key questions:

  1. How can the company best sustain its financial viability in this market?
  2. Do we have any funding requirements?
  3. Do we have a strong management team and the best supply chain partners and advisers? If so, how can we make the most out of our connections and relationships with these people to help us?
  4. Are there elements of the business that we could consolidate? Are there potential exit options or alternatively, target markets out with the company's usual expertise that we could move into?
  5. Considering these factors, what is our likely timetable for these types of projects and how do we achieve them?
  6. Do any changes we make to our business change our compliance requirements?

If they confirm that remodelling is right for you, always keep in mind that compliance with regulatory issues must be retested. Employment law, Health and Safety Legislation and your Insurance cover, for example, all remain the same. Any changes made to the running of the company which affect employee roles, job practices or business process must still stand scrutiny and advice on compliance may be necessary.

It is crucial in these uncertain times, that companies identify requirements in their business early on and don't let opportunities pass them by.


Duncan Cathie

Senior Associate