An Aberdeen businessman rejected for lifeline Covid funding has warned the “unequal” system will lead to some firms gaining a competitive advantage.
Findlay Leask, who runs wholesaler Caber Coffee, has had two bids for Scottish Government support turned down.
After the UK entered lockdown last April, his firm was taking in just 5% of what it had the year previous.
Mr Leask supplies specialty coffee and equipment, including Caber Coffee-branded beans, to premises across the north-east.
Even though his main customers, offices and businesses, remain shut, the firm’s income is only around one-third what it could be – but he is still having to pay his regular running costs.
Over the last 10 months, he estimates he has spent £70,000 covering upkeep for his premises, equipment and vehicles.
In December the Scottish Government opened a scheme for food and drink wholesalers experiencing a coronavirus slump in sales.
It specified that wholesaling – distributing “multi-supplier stocks” – must equate to at least 80% of turnover, and cannot include making, growing or processing items.
In the days before Christmas, Mr Leask’s bid was rejected as food and drink wholesale was not the “main part” of his business.
On appealing the decision, he was told repackaging items also does not count as wholesaling activity – meaning he does not meet the threshold for eligibility.
But Mr Leask says this was not made known to him beforehand.
He said: “If this was a main clause, it should have been written there in black and white.
“The rules should have been clearly stipulated from the outset.
“We produce our packaging but we could quite easily have blank packaging – would that let us qualify?
“It’s terribly confusing.”
He added: “I have a grave concern that over the coming months until the coronavirus pandemic is resolved, some businesses with little nuances in how they are set up are gaining a competitive advantage.
“I was prepared at the start of the 2020 lockdown to have to muddle through this, with little help other than the furlough scheme.
“But if there’s going to be funding given, it needs to be on an equal basis. There must be a fair way to do this.”
A Scottish Government spokeswoman said all Covid funding applications were assessed “consistently and fairly”.
She added: “We recognise this is an extremely difficult time for many businesses.
“The Scottish Government is continuing to review the impact of restrictions on different sectors and available support for businesses.
“We encourage all businesses who feel they are in need of support to contact their trade body and continue to monitor the guidance, advice and tools for all sectors across Scotland which is available at findbusinesssupport.gov.scot
“The application guidance indicated that to be eligible, food and drink wholesale must be the main (80%) or only part of the business.
“Caber Coffee was determined to be ineligible because secondary processing such as repacking raw materials into own brand products made up more than 20% of the business.”
She said £30m funding has been provided to councils to provide “additional discretional support” to firms.