Sluggish restaurant trade hits suppliers

JAZIAL CROSSLEY
Last updated 05:00 11/12/2012

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Suppliers are feeling the pinch as Wellington cafes and restaurants struggle, with about 20 per cent of eateries having trouble paying bills for wholesale ingredients.

Hospitality establishments around the city are recovering from what many say has been the hardest winter in years, during which even top chef Martin Bosley had to consider closing his namesake Oriental Parade restaurant.

An employee at the Wellington branch of wholesale suppliers Davis Food Ingredients, which also has branches in Auckland and Christchurch, said the capital had been hit harder than the rest of the country.

The company had been supplying everything from coconut cream and juniper berries to smoked paprika and penne pasta to cafes and restaurants for 40 years.

"This has been a very tough year, definitely. The last six months particularly has been tough, Wellington-wide. Public service is obviously a big factor. No-one likes to admit they are struggling but people are definitely cutting back, waiting longer before they order."

Meat Direct owner Victor Smith said this year had been tougher than last year with one in five clients struggling to pay on time but customers were now slowly repaying bills.

"Like any business, our meat companies have to be paid within seven or 14 days so if [clients] don't pay us then of course it becomes harder for us. We are well established and we have been able to get through but if you don't work with your clients, you're not going to get your money."

Lower Hutt-based Jina's World of Fresh Produce managing director Ajay Jina said he had noticed about 20 per cent of customers were having trouble.

"If they are not paying their supplier that puts undue pressure on their supplier's cashflow, and that goes right through to the growers."

For some cafes and restaurants mismanagement could be the cause of their struggles to pay suppliers. One of the largest wholesale suppliers of fresh produce in the Wellington region, Jina's tried to keep communication open with customers to tailor certain products towards their budgets.

Many cafes and restaurants were trying to avoid having pumpkin on the menu at the moment for example, because it was expensive due to a spate of bad weather during planting time, damaging the current crops.

"They don't always need the best bananas to put in their banana cake, they could use some overripe bananas which are cheaper: things like that. Some people will want asparagus in the middle of winter but that will be imported so it is hugely expensive . . . Some places need the guidance of somebody that has got a lot of experience."

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Smith, who had been supplying fresh cuts of venison, lamb and pork meats to Wellington businesses for 14 years, said he was cautious taking on new customers who might not have the skills to balance their budgets. "If they are spending lots on a fitout we would question if we would supply them."

- © Fairfax NZ News

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