The massive fall in tourism from Germany and the UK because of quarantine measures and the increase in coronavirus outbreaks has left product distribution companies with no work, no income and a mountain of debt.
“The situation is catastrophic and the negative evolution of tourism production makes us fear a string of company closures this Autumn and Winter. We are facing a very negative economic horizon,” says Bartomeu Servera, President of the Association of Distributors of Drinks, Food & Cleaning.
He points out that the distributors already went through a very tough situation during lockdown and says income statements are now at a minimum.
“We had all made the appropriate investments in June to supply ourselves with products for hotels, restaurants, cafes, bars and other sectors, but the closures that are happening now have destroyed our forecasts, he says. “The decrease in sales has already exceeded 80% and will increase even more from September. We have warehouses full of products that we can’t deliver and the losses are going to be substantial because billing for our sector will be down €1 billion compared to 2019.”
Many companies in the Distribution Sector are already suffering from default payments in the first quarter and during the lockdown period.
“Those unpaid bills are in addition to those of other companies that opened after the success of the Pilot Plan between Majorca and Germany, but are now forced to close because of the progressive decrease in customers," says Servera. With no income they can’t pay the suppliers which puts us in a situation that was unthinkable and unimaginable just nine months ago.
The Distribution Sector has a fleet of 2,300 vehicles and 80% of it is currently paralysed.
"We don’t have the support of any Institution and they are crushing us with taxes,” claims Servera. “We are outraged by the lack of response from Politicians and Administrations, the viability of distribution companies, whose activity is key to the economy of the Islands, is in danger.