Foot-and-mouth's domino effect
The chill winds caused by the foot-and-mouth epidemic are biting everyone hard, not just the farming industry and tourism, but many other walks of life.
We are seeing the domino effect take hold as businesses and communities that depend on each other for survival and support are finding their livelihoods hit hard.
Now, with the disease costing the UK tourism industry alone up to £250m a week, the total cost to the country is immeasurable. Farmers are hardest hit, but there are a host of related businesses also affected, from hoteliers, restaurateurs, countryside activities, heritage trails and zoos, to industrial museums, retailers and manufacturers. Anything to do with leisure or any business in the countryside has been hit.
The meat and dairy industries have been particularly affected, which will affect quotas, grants and perhaps their long-term finances generally.
The epidemic is also beginning to damage arable farmers, with restrictions on movement hindering the harvest of winter crops, sowing of summer crops and supply and sales of seeds, mulch, etc.
While there is compensation available to farmers whose animals have been slaughtered, others not involved with the farming community are also suffering personal hardship.
Staff are being laid off when their employers cannot maintain their wages.
Others can’t get to work due to restrictions on movement. Some banks have offered interest and repayment holidays to those directly affected, but there are a great many affected who currently have no hope of compensation.
Many villages and towns are suffering as the epidemic cripples suppliers and manufacturers, shops and businesses. It has begun to have an impact on the conference and exhibition industry, plus the overseas tourist trade, especially from the US.
Businesses with their backs to the wall need to know there are alternatives to liquidation or bankruptcy. By keeping customers, suppliers, the taxman and financiers alike, up-to-date and fully informed as to their financial position, businesses can be helped to survive. Informal or formal voluntary arrangements may be put in place to spread the burden of debt.
It is too late to save hundreds of thousands of animals, but it is not too late to save most businesses, if professional advice is taken soon enough.
John Alexander is PKF’s corporate recovery and insolvency national director