 Good morning, and welcome to the 13th meeting of 2021 of the Economy and Fair Work Committee. Our first item of business is a decision to take item 4 in private. Are members content? Good. We'll move on to the main item of business, which is the fourth session of our inquiry into Scotland's supply chains. The inquiry is looking at the short and medium-term challenges facing Scotland's supply chain and how the challenges and shifts in supply chains are impacting on Scotland's economy. We want to consider how to build future resilience and whether there are opportunities to develop domestic supply chains. This week, we are looking at the retail sector. I thank the panel for joining us this morning and welcome Dr John Lee, who is head of policy and public affairs at the Scottish Grocer's Federation. He is the head of policy and external affairs at the Scottish Retail Consortium and Colin Smyth, chief executive of the Scottish Wholesale Association. Thank you for joining us in person this morning. I ask members and witnesses to keep the answers as concise as possible and we'll get through as much as we can this morning. If I could start with the first question. As part of the evidence that we've heard over the last few weeks, you can identify issues around Brexit and trade concerns, the global impact of Covid has been discussed and problems with labour and skill shortages. I'm interested in whether the panel agrees with those being the key issues that are affecting our supply chain or are there other areas that are particularly impacting on your businesses. If I come to you and McDonnell Russell first of all. Thank you for the opportunity to give evidence this morning. I think that that's a bang on summary of the big picture stuff. From our supply chain perspective, our members tend to have UK-wide supply chains, as someone will refer on that broader basis that the situation in Scotland is analogous in most cases, whether exceptions are identified that global challenges. I think the committee is probably well aware of from previous sessions with the costs and issues in global shipping and the mismatch that we've had between manufacturing capacity and particularly non-food goods and the kind of demand in global north so to speak. So that issue I think is well done. From our perspective, labour is probably the single biggest challenge from a domestic point of view. That's particularly acute from HDV drivers. That's been the single biggest challenge our members have had to reconcile. That's partly a structural issue. We've seen a decline in HDV drivers since 2016, but obviously that was massively accelerated at the start of the pandemic when a huge number of EU drivers went home, partly of course because of Covid, partly because of EU exit and of course partly as well things like tax changes at IR35 affecting the fiscal viability of some of these things. So that has massively impacted on our supply chains. I think we've seen that over recent months there and I think the situation is stabilised. It was very challenging in September. It still remains very challenging but it's not become worse. I would say that probably the reason it hasn't become worse on HDV drivers and broader in the system is one of short-term cost retailers have to make Christmas work. It's the most important time of year for us. So there's been a huge short-term cash investment. We're seeing that. I'm afraid coming through through higher prices. The BRC's shot price index is out this morning. Food prices for example are up I think 1.2 per cent was 0.5 last month. We're seeing month on month increases in costs that are now being passed to consumers. So that's HDV drivers. Labour is affecting distribution, it's affecting stores to a degree as well. Those things are slightly less acute in Scotland because we had fewer EU workers in those areas to start with but I'd say Labour is the single biggest challenge but in a very broad, worldwide difficult situation. There's also I think at the moment a Westminster committee are looking at similar issues and last week I think they were reporting that supermarkets and we're looking at narrowing the range in terms of Christmas offer so rather than having gaps on the shelf that consumers might see there would just be less on offer so it doesn't look as obvious that there's supply chain issues. Is that something that you recognise has been? I'd say that's completely accurate. It's one of the ways retailers have had to manage this. When you have fewer vehicles you focus on core range and the core products people want and that's why I can say with a little confidence that I'm sure everything you'd expect for a traditional Christmas dinner will be available but what it might be is that the full range of things you might look at might not be so there might be three pickle varieties rather than five or six pickles. You might not get as many types of mince pie so you'll still get mince pie or pickles but not the range that we would like to offer. That's a way that we can manage the challenges of matching supply chain disruption to getting things right at store for consumers. Dr Lee, would you like to respond to the initial question around what the challenges are facing your organisations in terms of supply chain? Yes, thanks, convener. You mentioned Brexit, the pandemic and labour shortages. Yes, there's absolutely no doubt that all of those things are big challenges and are in fact interacting to make those challenges even more pronounced but I think what we're really saying is a post-Brexit, post-pandemic, macro-level restruction of the UK economy. For example, as I think Yoon alluded to, we're beginning to get really concerned about cost price inflation. It looks like inflation is heading for 4.2, 4.6 per cent. There's real concerns about rises in industries. The Centre for Economics and Business has estimated that, in 2022, families will spend £1,700 more on household costs. Now we're beginning to get concerns about the impact of that and the fact that it might lessen consumer demand. Brexit, pandemic, labour shortages are all absolutely big challenges but overall this is now economic restructuring that we're seeing in the UK and there's no way that Scotland could be immune for that. Skill shortages, as Yoon mentioned, are a big challenge for the convenience sector at the moment. I'm sure Colin will touch on that, but part of the problem is that the supply chain is so integrated. Most convenience stores, while they are independent, will have a close relationship with a large wholesaler. Any problems on the wholesale side have a knock-on effect on convenience stores. The very integrated nature of the supply chain is a problem within itself. I don't leave any granular data on that but we suspect that what's happened is that there's been a massive move, partly accelerated by the pandemic, to online shopping. A lot of those companies are now expanding their operations, taking on new staff. They're making the terms and conditions of service quite attractive for that. There's a bit of a labour market merry-go-round where workers are moving towards other parts of the labour market and perhaps moving away from retail convenience, for example, which is causing labour shortages. The impact of the pandemic is still absent due to people testing positive and having to isolate. We're still seeing that across the supply chain, so labour shortages are probably one of the most pressing issues that we have at the moment. We did hear last week that, while people think about supply chain shortages, they'll often be the drivers, but there can be other points within the supply chain where it could be in digital, it could be in any kind of area, it could be in logistics, where if there's a break in that section, it's not always just drivers, there can be a break somewhere else in the process that causes the shortages. I totally agree and I'm sure Colin will touch on this more, but, as I said, a problem in a warehouse will lead to a problem in a convenience store because the supply chain is so integrated. It's not just the drivers, it's the people who take the orders at the cash-in-carry, it's the people who pick the products and prepare them for delivery. Problems with staff shortages are on the shop floor. Staff issues are right across the supply chain, as you say, and it's that very integrated nature of it that is leading to challenges. Colin Smyth, good morning. If you can refer it to the initial question, but also the paper that we received that I think also went to the Rural Affairs Committee, you raised issues or concerns around the financial concerns of your members and long-term viability issues of concern. Do you want to talk a bit about those as well as what the key problems in the supply chain are? Certainly, convener. Thank you very much for inviting us to present today. The Scottish Wholesale Association represents basically the wheels to the food and drink industry, so we represent the food and drink wholesalers that are servicing the 5,000 convenience stores that John represents and the 30,000 hospitality, tourism and leisure industries, as well as all the public sectors of the schools, hospitals, prisons and care homes. 90 per cent of our industry, and certainly in Scotland, is made up of SMEs, so it's a lot of family-run Scottish SMEs. That's where the challenge arises for us, that they don't have the scope and scale that maybe the national wholesalers have and the buying power that is required today in order to achieve the availability that John is expecting and even the hospitality. Where we are, I agree with the statement that people and product availability is a big issue for us. Product availability, especially. We are reliant on national supply chains, and a lot of the food comes in from the EU, up through England and into Scotland. We are at the furthest end of the supply chain, so any problems further down south have a big problem for us, so shortages of drivers down there means that stock doesn't go into Scotland. In Scotland, once it's here, we don't have as big a problem necessarily in HGV drivers, but within our sector we are still 10 per cent short of drivers to get the food into the shops. That is slightly better than the last time that we surveyed our member. We were running around about 15 per cent to 18 per cent. What we have done is train staff that is already in our businesses to drive lorries. We have taken staff off the shop floor and put them into cabs. That has had an impact on the availability of pickers within our warehouses and sales staff, etc. Where we are 10 per cent short on drivers, we are also 10 per cent short across the rest of the business, which is putting pressure on the picking to get it into the lorries. In terms of the product then coming into our businesses, we and the central belt are running around about 85 per cent availability, so that means that for every 100 cases that we are ordering, we are getting 85 delivered, which means that there is then a shortfall of product going into the retail sector. I say that 85 per cent in the central belt because the further north you go, highlands and islands, that gets worse because it is a bigger cost to the producer manufacturers to get it up. Certainly to the highlands and islands we are running about 70 per cent, so for every 100 cases we are only getting 70. The additional problem to that is that the producer manufacturers that are supplying into our warehouses are delivering not as frequently, so where we would maybe order day one, so we order today, we would maybe get it on Friday, we are now not getting it for at least a week or even up to two weeks, so the lead time is a lot longer. If we are off sale of those short goods, we are off sale for twice as long. What is meant, then, is that we are having to stockpile even more into our warehouses than we would normally. That means that we have members that are stockpiling three times as much stock as they would normally. That is putting huge commercial problems into the business of cash flow especially. On top of debt that we have already been lumbered with coming out of Brexit or Covid, sorry, where we have had to take on loans, sebal bounce-back loans and that is now needing to be recayed. Cash flow is a real problem within our warehouses. We wrote that letter to say that we have got viability issues. It is because 90 per cent of our members are SMEs. They have severe cash flow restrictions. We had no Government support in the same way as retail and hospitality had in relation to rates relief. Thankfully, the Scottish Government gave us a wholesale grant fund or resilience fund, which genuinely saved some businesses from going to the wall. The UK Government has given nothing to wholesalers, albeit there is a discretionary rates relief supposedly coming through. It will hopefully get passed in the next few weeks and then we will get the consequential switch that we are asking the Scottish Government to give in the same way to Scottish wholesalers that raise relief extension. I think that that gives an idea of where we are and the precarious situation that we are in in terms of staffing drivers and product availability and that vulnerability of the supply chain, especially as we go up into the more remote areas. Just briefly, the committee was interested in your membership, so you said 90 per cent are SMEs. I think that if you have 68 companies who are members, it is just to understand how the Scottish wholesales system, so quite a lot of them are small. It is not just all big players. We have 70 wholesale members within the association who represent 98 per cent of all the sales through the wholesale channel. 90 per cent of those are Scottish SMEs. I can name names, but the other 10 per cent are numbers, but the national represents a far bigger proportion of sales within the industry. However, when we start to look at infrastructure structural changes, changes in the way that we deliver food in Scotland supporting local producers to distribute through wholesale and into convenience retail, we are going to be heavily aligned on those SMEs. They are the ones that are nimble and can adapt. I am more forward thinking that they do not have the same cogs and wheels to go through to help to distribute on those producers' products and get the product from the farm or wherever it might be on to the shelf and on to the plate. That's helpful. I'll bring in Fiona Hyslott by Jamie Halcro Johnston. Good morning and thank you for joining us this morning. We're looking at building resilience into the supply chain, so we're interested in your views as to what can be done primarily by policy makers but perhaps by banks or others to help to build resilience for your sector in the short term and the medium term. I'm pleased to hear from all of you if you can show your views as to what you think can be done to help in the short term and the medium term to build that resilience in the supply chain. Maybe start with you and then to John and then to Colin. Thank you. It's a really big question. From our point of view, our members have pretty integrated supply chains. I'll speak about them first. I'll make a slight point at the end about from a supplier perspective. I'm not as qualified there, but from our point of view, I guess that in the immediate short term, the steps we've actually currently seen have been enormously helpful. Colin mentioned rates relief in Scotland. We've been incredibly fortunate. We've had two years of full rates relief except for those retailers who haven't felt need to take advantage to that. That's allowed businesses to keep floating up here. It will have kept businesses open. I think that's a single measure because rates and people are the two big costs that come in for retailers that support that. Again, that's why when the budget is announced next, we will be hoping that there's perhaps not the same thing, but certainly some sort of modest reduction is the single biggest measure that will help our members because cost at the moment is hugely problematic. I think more broadly on the resilience and skills, there's a challenge our members have in Scotland in that they get very little access to skills support or skills funding. The decision the UK government made a few years back to create the apprenticeship levy and to change the format so the revenues of that passed the Holyrood, but of course previous skills funding from Barnett consequentials doesn't. That's left to a situation which is pretty iniquitous for retail. I think it's something like 2% of the flexible workforce fund has been spent on retail. Retail model apprenticeships have fallen by 44%. From our perspective, we've got specific skills issues. HIV drives is a great one. Skills in terms of actually trying to drive productivity and make our businesses more efficient. There isn't really support for that for retail at the moment. Those are the two big instinctive ones. There's a wider point perhaps about infrastructure we can touch on. More broadly, I would just note looking further down the supply chain that the lack of access to labour and systems that work effectively to allow seasonal or short-term labour is incredibly problematic. I think if you look at the success of the short-term visa scheme for poultry workers, which has allowed EU workers to come in to fill out a very specific gap in the economy and that's why we should have plenty of turkeys for Christmas and I feel a bit more confident on that. That flexibility in labour is something that would enormously help support, both from our point of view but also particularly in food and our suppliers. Can we come back to you on the infrastructure issue later, but John? Thank you, yes. It's a difficult question to answer. I mentioned earlier the kind of restructuring of the UK economy but clearly there are global economic issues at play here as well. One of the key underlying factors in the rise of inflation is the increase in energy costs. Clearly it's very difficult for the Scottish or UK Government to do something about that. Staff costs, as you mentioned, are a massive issue for the sector. Anything that Government or policy makers can do to keep costs down is hugely welcome. We have very much supported the call from Scottish Retail Consortium to look at business rates. We have had essentially a two-year holiday on business rates, which has been brought forward by the Scottish Government, which has been a lifeline really to a great deal of businesses. If there was a sensitive approach to a realistic approach to reintroducing business rates, perhaps at a reduced poundage rate, that would be very welcome. Small retailers benefit hugely from the small business bonus scheme. I'm not trying to make a party political point here, but I sometimes think that the Scottish Government thinks that it doesn't get the credit that it deserves for that scheme, but it's just to say that it is a lifeline for small retailers. I think that the Government is to be congratulated for its commitment to maintaining that throughout the lifetime of this Parliament. That is a very practical, tangible way of supporting businesses. To touch on the resilience point particularly, we have noticed that we have been encouraging our members over the past few years to try to make as many business connections as possible with local Scottish suppliers. We think that that is a potential way to reduce supply chain supply chain problems. Some of that has been very successful. We have a programme at the moment called Go Local, which is supported by the Scottish Government. The whole aim of it is to maximise the space in a convenience store that is given over to locally sourced Scottish products. We think that that local pace, making connections with local businesses, Scottish manufacturers, could be a way—long-term, we admittedly—but it could be a way of building more resilience into the sector and making it a bit less acceptable to any of the wider supply chain issues that we see. Anything that keeps costs down is very welcome, but I think that there is something here about local and making businesses more convenience-ready, if you like, making sure that they can take advantage of the community's channel and making sure that convenience retailers can form those types of business relationships. I will pick up on the point that we are talking about rates relief, and I mentioned it just when you were asking what the Scottish Government can do. We did not get any of the rates relief that were offered to the retail and hospitality. We would ask that the consequentials that I mentioned—the 145 million consequentials that are coming from the UK Government—are given to wholesalers and the way that they are intended as rates relief or discretionary rates relief. Or, indeed, the Government works with ourselves and we look at where the support is most needed within our sector. If it was decided that rates relief was not the best mechanism, we can certainly help to distribute the money where it is required. If we are just going to look at the resilience of the supply chains, we can certainly commend the Scottish Government on everything that it is doing with the local programme. That is something that we need to be supporting and we are supporting. John and the Scottish Government are getting the retailers ready to display more Scottish products and to have more of those interactions with the local producers. What we are doing at a wholesale level, supported by the Scottish Government's recovery fund in conjunction with SCOS and where Scotland Food and Drink are helping us to deliver it, we have developed and are delivering growth through a wholesale supply chain partnership training and education programme. That is about educating wholesalers on the benefits of working with local producers and suppliers and getting more Scottish products on to our shelves, on to our vehicles and into the retail and hospitality outlets. It is also a training programme to educate the Scottish producers on how to deal with wholesale, because the wholesale routes market is a slightly different model to putting lots of boxes into a supermarket or exporting. There are different capacity issues and it is about training those producers on the benefits of wholesale as a route to market. That has currently started. The first phase of that is oversubscribed with the workshops that are happening in January and February. We are looking for further funding to continue the roll-out of that through the recovery fund. We also have a request to Government just now about phase 2, which is direct investment into wholesale to start and overcome some of the challenges that have been identified in phase 1 of why wholesalers are not necessarily stocking as much product or local product and start to overcome some of the ballot barriers so that we can get more produce into our warehouses. That whole sustainability, that whole delivering growth through wholesale, is about sustainability as well. It is about reducing food miles and not having the reliance on imported goods in the way that we have been. It is about the resilience of the food supply chain. Delivering growth is about reducing food miles, but we also have another project on the go, which is about decarbonisation of the wholesale industry. That is over three phases. Colin is aware of phase 1, which was starting to identify a baseline on the fleet emissions of our sector and how we can decarbonise those. Phase 2 is looking at our buildings and phase 3 is our people. There is a lot that we are trying to do within the wholesale sector here in Scotland to create more sustainable supply chains and new tomatoes. That is very interesting. Parallels of resilience are indeed the interconnection between resilience and sustainability and decarbonisation generally. If you want to say something further about whether there is anything that policy makers can do in infrastructure, I take it that the banks have been quite happy with you. You are quite content with your membership on that. It just occurred to me in terms of cash flow. There might have been something about resilience there, but if anybody wants to come around that, if not, fine. You and I wanted to talk about infrastructure. From that one side, you have got the physical infrastructure side, that the big routes that retailers use, such as A1M74, A9 connections to Ken Ryan, are obviously going to remain really important. Those are the arteries. Rails are being used by a lot of retailers, and part of that is because we have got pretty strict commitments on net zero to get our logistics by 2035, where members are most what they think is an okay place at the moment. There is a huge challenge in getting vehicle fleets changed. We need to get electric vehicles, green vehicles and alternatives. There are things policy makers could look at in that area. That is partly an infrastructure question on making sure that we have got charging points, having universal charging stations and fast charging. It is also things like, perhaps one for the UK rather than the Scottish Government. It is things like how the VAT system works for buying green vehicles, whether fiscal or capital incentives are there to encourage that transition. There are lots of retailers already doing that, having really efficient vehicles, making sure that you plan your routes properly and having that undisrupted, but there is also a step change needed to get it to net zero. We are really aware of that. So when we are thinking about resilience and thinking about infrastructure, thinking a bit from a green perspective is absolutely critical, because that is where the industry is going to be in 40 years time. Thank you very much. I know that colleagues want to pursue some of these issues as well. Thank you. Jamie Halcro Johnston to be forward by Maggie Chapman. Thank you very much, convener. Good morning to the panel. Thanks for coming in. I've got two questions, so I'll go through them fairly quickly. The first one, I suppose, is to yourself, Ewan. You've talked and others have talked about some of the issues, but obviously there are problems with supply chain issues across Europe, and HGV drivers are a global issue. So that's not something that we exclusively are suffering from in the UK, but it obviously is still a problem. We've talked, I think, previous witnesses to this committee have talked about global supply chains not necessarily coming back for, I think, 18 to 30 months, real issues there, and we've seen in the last week or so, a couple of weeks perhaps, as the chartering of ship, to make sure supplies are able to come in from abroad. I suppose, do you see more of that, particularly from some of your members, actually building their own supply chains rather than relying on the traditional, normal and under pressure supply chains? I think the short answer is yes to both of them, but I'll elaborate, obviously. I mean, the global supply chain issues are massive, and that disruption that's been caused and continues to be caused by the pandemic, and it's partly, of course, that when we've got different lockdowns, rules, restrictions, there's a ripple effect happens. It's also that the consumption patterns are very unpredictable when you've kind of manufactured trig stuff in the Far East, for example, you're kind of thinking, well, in three months' time, my consumer will want X, and we didn't anticipate everybody would keep buying televisions. It's a very good way to put it, but that's not just a UK or Scottish, that's absolutely an international thing, and that dissonance between goods and services has that, that's led, there's also other supply chains, semiconductor, there's a classic one, the materials you need. All these things aren't going to get fixed there, and because it's very fragile, they're very vulnerable to disruption, that's why the boat getting stuck in a Suez canal was kind of a great sort of viral social medium, but it also caused enormous problems because the system is very, very stretched, and HDV drivers is also, there are huge structural problems with that because it's a profession that it's very, very difficult, you need to be pretty highly trained, and it's incredibly unsociable. One of the challenges that is relevant that we've experienced off, but I'm sure it's true elsewhere, lots of the work further in the supply chain often does involve unsociable hours, they'll involve working in quite challenging work, when we have, as we do totally in the UK, but also elsewhere as you say, we have labour shortages, it becomes more appealing to do other things, and that there's a kind of pull factor to I'd rather do something else than this, that's probably quite good for those individuals, and I certainly wouldn't complain about that, but it does present real challenges from our side of it. I don't know if either of the other panel members want to come in on that, don't feel you have to, but yeah, Colin. I'm happy to, I mean, in terms of building your own supply chains, it's very difficult for our members to start and go out and procure ships, you know, it's actually extremely difficult for our members, a lot of our members, smaller ones, especially to actually meet the minimum requirements that suppliers are now demanding of them, and that's the other impact that our members are facing, that, you know, those that can fill pallets and full trunkers, they will get the stock, and by full pallets if we take a pallet of beans, for example, 24 tins of your 415 gram beans, that's 96 cases on a pallet, that's 2,304 tins, that's 1,300 pounds per pallet, and if they're asked to buy a trunker, which is 26 pallets, you know, we're now talking 15,000 pounds, we can't afford to buy that amount of stock if they're only maybe selling two, three pallets a month, and that is a critical point. The large, the large producers, manufacturers are now putting demands that they will only be able to fulfil and deliver if you buy that volume, because, you know, that's, you know, there is a shortage of drivers, there is a streamlining of processes, there is a commercial decision those producers are making, and that will only benefits the larger wholesalers and national wholesalers at the detriment of the smaller ones, so, you know, creating your own supply chain, certainly not possible within our sector, and unfortunately, what we are seeing now is actually something that we would probably have seen in maybe five, ten years, Brexit, Covid, et cetera, has just exacerbated it, and we don't see this going backwards, so there is a fundamental, you know, there is a fundamental problem that needs to be resolved. I don't necessarily have the answers, but there will be more consolidation within the marketplace, within the wholesale marketplace, and phase three of the delivering growth wholesale was actually starting to look at, actually, how we pool resource, how we pool not just our members, but those from the Rhotology Association and all other sectors, to start and look at geographical hubs for food and other supplies, and how that might work. So there's a much bigger project and that there's, you know, something Government could and should be looking at, and that we can certainly help with, because this is not going to reverse, I don't think. So you think that we'll see, probably medium to longer term, a consolidation within that sector in short term, perhaps increased prices perhaps being pushed on through to Dr Lee's kind of sector? Most definitely. I mean, we're seeing food price increase. I mean, you mentioned what was at 1.2 per cent. Oil has gone up 50 per cent in the last three months. Cheese, dairy products gone up 40 per cent in the last month and a half, 25 per cent increase on pasta and core goods. You know, our fuel prices have gone up 50 per cent since this time last year. You know, so the costs of us to serve, the convenience store and all the others we do, is going up exponentially, and we can't absorb those when we're on 1.3 per cent net margins. And if I may just take the opportunity, the public sector that we are supplying, you know, they have been good at the moment, where there's a lot of price increases going through to the schools and hospitals, but you know, this is just to start, there's further in price increases already started coming on to our members' deaths for January, and that starts at 5 per cent. So, while we've got food price increases just now, we're already seeing price increases coming through for January. And many of your clients will be under pressure and be looking for, or they'll always be looking for the best deal that they can get and the best cost. Can I ask, because I think we'll probably come back to this, but there was a question I did want to ask, obviously. This is really about trying to find solutions, or at least where kind of improvements can be made and the like. In terms of consistency, because during the pandemic, one of the issues I know a lot of, the hospitality sector were closed and they were open and they were closed, and so demand was up and down, which must have caused big issues, particularly for your sector. I suppose it's how within Scotland, whether it's Scottish Government or local authorities, what can be done to ensure that there is supply isn't up and down like that, and also just the practical side of being able to deliver to clients where those barriers are at the moment, what's important to be able to do from a Scottish Government, from a local Government point of view? I think we're always going to get the fluctuations that's down to the consumer. They're expecting everything to be on demand and on their shelves when they want it, but if you go back 30, 40 years when we were all kids, we were buying locally, we were buying seasonally, and I think when we start to look at that local supply chain, I think we have got to educate that actually we can't continue this always there, that people are going to have to take what they can get when they can get it, and that goes back to the sustainability piece as well if we're serious about getting to net zero that we can't continue, I guess, or bringing food in from all over. In terms of local authorities, I think one of the things that we need to be working with them on is having that realisation that we're not always going to be able to deliver what they might expect, I'm talking supposedly into the public sector, and that there needs to be more flexibilities in the substitutes that we're able to give, that a lot of the schools are handcuffed and what they can and can't take, so if we don't have this particular type of, I'll say pizza because it was an example that I gave to Food Standards Scotland yesterday. There's a set standard of, there's a certain pizza that comes in, but it comes in from Europe that's not been available, so actually one of our wholesalers went out and actually got a pizza made to the same speck in Scotland, but it was more expensive, and the school were like, no, we can't afford that, so the wholesaler then had to sort it. The wholesaler did his best to make sure that school got what it required, but it was a cost into wholesalers, so there needs to be a bit more flexibility and understanding, and that if we're going to go down the local food route, that it is going to be more expensive as well, and that's something that local authorities and Scottish Government who are funding the local authorities need to bear in mind. Maggy Chapman, by Colin Beattie. Thanks Claire. Good morning to the panel, thank you for coming in this morning. Ewan and Colin, you've both spoken about HGV drivers and the shortages and issues around there. I want to explore that, and in light of what Jamie was saying, what lessons can we learn and what can we do in the future? How have the policy announcements, the various changes to how HGV drivers can function, the emergency visa scheme changes to HGV testing capacity, those kinds of things? What impact has that had on the shortage of drivers, and how is it different to the poultry worker example that you gave earlier, Ewan? What is the impact on you and your members of the increased labour costs, the increased salaries that those drivers have been getting, and what can we learn, what do you need for the future? Ewan? Thanks. To take the question about testing first, that's been really helpful. There was a huge backlog in getting you HGV drivers because testing got held up during the pandemic. It was immensely helpful for the UK Government to move that up, obviously, for that here. I think there is a follow-up point related in that solution space of looking again at what skill support training is available so we can get more drivers. HGV drivers are the key critical ones at the moment. It's worth noting that the way retail is changing, becoming much more digital. We're not quite at the 65% we were in the pandemic, but we're still consistently now at 40% of retail sales, certainly in non-food being digital, and lots of retailers moving to that. There's still a requirement for drivers not just to do great articulated lorries, but to do the smaller vehicles as well. That's an area where there's a growth there. It's something businesses have tended to take on, I think, if there was support for training. On the visas, it's a really good question. To be blunt, the HGV driver scheme was too little and too late. We were calling for it in the summer. I think if you'd had that in the summer, I had time to do the recruitment process to bring people in. The difference with poultry workers is commonly because that is the work that is inherently seasonal. So lots of those workers will go to different parts of the country. That's why in agriculture there's a real, I think, merit in accepting the certain times of year when you do need extra labour and labour that tends not to be available locally because people won't move to, for example, Angus to pick fruits for two months because you can't live there all the time just doing that. So I think that that's quite disanalogous. I think we need to find something that balances these two things. I think our big concern going forward is that we still have a shortage of HGV drivers. As we've mentioned, that's been fixed from a grocery particularly, but for a retail perspective or bigger retail perspective by increasing prices and or not by increasing wages to those workers, that input cost alongside a lot of others is starting to feed through in terms of price rises. The price rising is quite important to understand because it's very unusual in retail because we have intense competition, especially in grocery. You have a market where there were kind of four big traditional retailers and we have discounters and others come in and it's hyper competitive. So it's very unusual for price rises to come in because everyone's terrified of losing market share. That we're seeing that coming through a tool is a sign that the pressures are very intense. What it also doesn't characterise is there are other ways that you reduce costs as well. You might not have people doing as many hours in the store. Again, you shift ranges, you change things around, lots of things happen. Very few of them are in the up to the advantage of consumers. They tend to be deleterious one way or another because it's the only way retailers can manage it. So that's kind of how that alongside other things is feeding through right now. Thanks, Ewan. Colin. Yeah, I agree with the fact that Ewan was saying something. I think the difficulty for us is that we can't give the same wage rate rises and that maybe the supermarkets and the larger retailers can afford given their scale. As I said, we are working 1.3 per cent margins. So as I said, we've been trying to take people from the floor and train them ourselves. We have given wage rate increases, but we can't just give to the driver when we've got the person on the shop floor, the sales administrator or the accountant that are all doing similar valuable jobs. So we've had our members to give everyone a wage rise to keep them. Across the piece, I think that we've seen a 20 per cent average wage increase across the sector. The visa scheme doesn't really help us again. We're at the furthest end of the supply chain. We've never been a sector that's been reliant on EU nationals or migrants. The problem we've had is because they've all gone home that there's a lot more job opportunities for Scottish national workers to work and pick and choose. That's where we've now seen a loss of the drivers. It's not because it was an EU national that's gone home. We're going to have this problem for at least 18 months. I think that it's also about not just recruiting drivers, but how we reduce the need for the drivers. There's things like the Rhodology Association work closely with them and Malcolm Group. They've got a request for a 48. That's 48 tonnes within 48 miles. That's about being able to take containers off the rail and onto a lorry to take it to distribution hubs. That will take the need for drivers or trucks off the roads. I can give you the detail on that, but there are other solutions about taking trucks off roads and the need for less drivers. John, you haven't specifically spoken about that, but I don't know if there's anything you wanted to add. I recognise everything that Colin Ewing and I've said, and it certainly resonates with me and with our members. What happens in convenience for retailers will get on their vans and look for more suppliers. I know that Colin Ewing is well aware of that, but I hate to admit it, but a lot of our members are quite promiscuous when it comes to cash-and-carry and wholesalers. They will get in their vans early in the morning and they will go and try to source product. By and large, there are big problems, but convenience retailers will work very hard to try to ensure that they get the product in some way, some way or other. The cumulative impact of that is that they have to work harder. We are getting some anecdotal reports from our members that, rather than having one main supplier, they have three or even four just to make sure that the shelves are well stocked. That means that they are having to devote much more time out of their day just to managing stock control, delivery schedules and dealing with two, three or even four suppliers. It's keeping the shelf stocked, but the cost and the burden of having to manage that is very real. Colin Ewing, you mentioned labour shortages. Is it difficult to recruit people into the sector? You said that you have to rely more on the Scottish workforce now, or is it just that there is too much competition in the wider and broader employment market? Yes, there is a lot of competition in the market. There are more job opportunities for people to move from one sector to another, not necessarily food. It could be food into clothing or whatever it might be. There are just a lot more jobs out there, so people are picking and choosing where they might work. The core workforce has always been Scottish employees, or certainly UK employees. One of the things that we have asked Scottish Government to do, and it is critical because of where the wholesale channel fits in all the crossovers between Government policy and legislation and the different layers to our sector, is that we start to look at a wholesale sector strategy that looks at all those issues from the training and staffing and the product in place. We are educators to some degree. We are educating the retailers. We are educating hospitality on new product development, on store layouts and on new initiatives. Our members are also the symbol brand owners, so when you see a convenience store that might have premier or day-to-day or SPAR, those are wholesalers' brands that we are offering to the retailers to give them competitive advantage against the big multiples and something to hang their hat on and give and encourage the consumer into their shops. We are not just about box movers, we need to get away from thinking that wholesale is just simply moving a box and we are the educators to the retailers and we have development kitchens within our members that actually work with the chefs within the restaurants and the hotels. There is a lot more to us that people do not understand and when you start to look at people leaving schools, people do not know wholesale. We struggle to recruit even from schools or a closer relationship. We need to build with Skills Development Scotland and develop a young workforce. I would like to focus on one particular aspect that we have not explored up to now. Over the years, the UK economy in general has moved on to a just-in-time standard, which means that you are expecting that truck to be backing up to your door at just the right time. It would appear that there has been something of a shift to just-in-case, which means that people are keeping a certain amount of stock, which perhaps in the past they would not have. There is a cost to that, obviously, but how widespread has that been? Is there an indication that that maybe is a longer-term shift in the way that business is being carried out? Maybe you and I can ask you the question first. I do not know if there is likely to be a sustained shift in that way. I think that from our member's perspective there have probably been specific moments when that happens. Partly right now, of course, we are in the run-up to Christmas when we have huge volumes going in. Every year you would get extra stock being held on. It has been done a couple of times. We have had to have extra stuff on demand predominantly because of things like panic buying during the pandemic in March last year when there was that huge challenge in that. Some of the challenges around preparing for potential EU exit when particularly the prospects of things like no deal were coming up, those things have required specific things to be managed to try and make sure we could guarantee sustainability. Long-term, I think it is unlikely particularly in grocery, but generally in retail that you would want to get to a position where you were not having just in time. That is because the impact of not doing that is efficiency, but it is efficiency in two levels. One is the efficiency of cost. You do not want stock in warehouses. You want it on the shelves where customers can buy it. Secondly, from a waste perspective, the less time that product spends going from coming into your distribution centre to being in the stock to quite frankly being in a customer's house, that is massively important from that sustainability perspective. Even though I think it is something like the average is 74% of food members' cell tends to be a British source, you still do not want lots of time between the farm and getting that into people. I think that imperative on sustainability drives quite a lot of that. I do not think that you want it stored. There is a caveat here that I will put to some elements of non-food in the last year because of the necessary things like the lockdowns and restrictions on trading. A lot of things like clothing retailers have had a huge problem in getting stocks sold because they are not able to sell it. They have probably had some that have been stockpiled up almost because, if you asked last year's spring range, I could not sell any of that. We will launch some of it next year, but that is probably quite specific to the pandemic. I do think that that is distorting quite a lot of things at the moment. What about the wholesale side, Colin? I mean, I said earlier on that we are now having to increase our stockholding purely to meet the demands of the producer or manufacturer to get the goods in. We would love to have a just-in-time. I do not think that it will necessarily go back to just-in-time, just in case, certainly. Our stockholding has gone from an average of, depends on where you are or who you are, the bigger guys. Maybe we are running a two- to three-week stockholding there now. It is six weeks, but we have other members that maybe had four-week stock and are now sitting with 10 weeks again just back to that same analogy. If I may pick up—I said the chunker of soup was £15,000—sorry, it is £35,000—a bit of a substantial difference. However, going back to Europe and bringing stock in, especially wines, we used to be working on a two-week lead time for wines coming in to Europe. That is now up to two months. It is making planning, forecasting, financial cash flow and impacts. Everything is a real problem within our sector. Just-in-time still is pretty much working in the large supermarkets who can afford to bring in those trunkers in that volume. I think that you might correct me, but one of our larger members is saying that the supermarkets are sitting with six-day stockholding where we are sitting with six weeks. It is because of that that they are able to turn over quickly and get new stock in. However, it also means that there is a preferential service to the multiples at the detriment of the independent channel that we are supplying to John's shops. That just-in-time is a far way off again, if we manage to get back to that. To be clear, the retail side is more or less still working on just-in-time, but the wholesale side is a different story. You are having to keep stocks, which obviously has other implications in terms of costs and so on. What is cost? It is forecasting, it is stock that is going out of date. By the time it gets to John's, it will have lost maybe a month or two months shelf life. The wholesale side is supplying into the independent retail channel, so John can correct me. Four-fifths of the Scotland's grocery market is multiples. The other fifth is made up of independent convenience stores that our members are supplying into. Is that one-fifth of the market that is suffering more so than the larger chains and discounters? You are talking about a very dramatic shift in terms of the volume of goods that you are holding. Where are you finding the storage for this? That is a very good question. We are struggling. We are bursting at the seams. Some members have taken out additional storage space if they can find it, but I think that the bigger problem is more just the cash flow. I had spoken about banks and our members are reluctant to take out more debt, because they are already lumbered with it from Covid and the loans that we had to take out to pay our staff to pay the overheads. We still had to pay the electricity to run the chillers and the freezers. I am not painting a pretty picture, but it is the reality of the situation at the moment. Do you see this as a long-term situation, where you are going to have to continue doing this? 18 months is what the members are saying that they do not see any end in sight of this. It goes back partly to the supply issues. The shortage and drivers are bringing the stock from the manufacturers and producers to our warehouses, but the raw materials coming in from Europe and the shortages that we are having on cardboard, plastic, aluminium, steel and CO2 issues. It is just a cacophony of problems. You have mentioned the possibility that this would last for 18 months. Is that based on anything other than hope? Yes, purely that. Are there any tangible evidence that 18 months or 24 months will fix it? The 18 months are based on when the labour supply issues will have ironed themselves out, specifically on the drivers. If we focus on the issues, drivers are getting product to from port to warehouse to store. What you are saying is that at the ports, you were talking about wine for an example, it used to take two weeks to get from the continent and now it is two months. That is a huge issue. Even if we solve the internal issue as regards the supply chain, we still have that tricky bit at the border that you are going to have to compensate for. Yes, the stock is not necessarily sitting at the border for two months, as I was saying, I hope not. I feel that it still might be. It is problems in Europe in terms of the same labour problems, the Covid is there, they have shortage in staff to make the wine and whatever else. It is not just about at the ports. Nobody has a crystal ball and reiterating or conveying what our members' feelings are and the issues that we have within the supply chain. I think that there is a lot of hope there. John, could you comment on behalf of your members? It was a really good question and a really good analysis of the way that the sector has developed over the past few years, and you are absolutely right. The business model and convenience is fundamentally based on just-in-time stock control. I think that there are a couple of reasons for that. The first one is that, essentially, we are talking about fast-moving consumer goods and a high level of impulse buying. Customers expect the product to be available to them. In a typical convenience store, there are about 4,100 separate stock keeping units, i.e. products with an individual, but a separate barcode. They have to offer a huge range of products to their customers, because typically, if a customer walks into a convenience store and cannot find what they want, they go back out again and they do not come back. However, I think that just-in-time system has been facilitated by technology. Most of Collins members will have apps that link the retailer directly with the wholesaler, so it is now quite easy to order online, theoretically, exactly when you need it for a fairly rapid delivery. Just-in-time model is now the fundamental business model in a convenience store. It is a really interesting question about moving towards just-in-case. I think that that would be massively problematic for a convenience store. For one main reason, they simply do not have the storage space. As Iain mentioned in his opening remarks, the grocery retail market in the UK is hyper competitive, so to remain competitive, convenience retailers have had to maximise every meter of selling space within a convenience store. Every meter of selling space has to be profitable, so the storage space has been absolutely dramatically minimised over the past few years. It would be quite difficult for them to move towards that just-in-case system, but it is really interesting to hear what Collins is saying about the way that the wholesale sector seems to be evolving. Will that have an impact on the business model of the convenience store possibly? It is a really interesting discussion, but at the moment, convenience is very much just-in-time, and it would be a challenge to move towards just-in-case. It appears from the convenience store point of view, like the other retailer, as they are anticipating that the wholesaler will provide that just-in-case backup, but there is going to be a cost to it, which has got to feed down at some point. Indeed, and it shows how important wholesale is to the whole supply chain. Gordon MacDonald, to be followed by Colin Smith. Thank you very much, convener. I want to ask you a question regarding just-in-time, etc. Is there different challenges for larger supermarkets than the convenience store sector? John talked about how his members will use a range of wholesalers to maintain stock levels. I am noticing more and more in the larger supermarkets that there are shelves filled with advertising cards rather than product, and that there is more space given over to a product, where previously it might have had a frontage of two or three columns. It is now six, seven or eight. Is there different challenges facing the larger supermarkets to maintain stock levels, given that they have got their own distribution system, etc, than facing the convenience store sector? I am very disappointed that the cunning plan to put up a couple of bits of plastic did not quite work. So, never mind. Being more serious, what you are seeing there is exactly the reflection of the kind of point you made about range earlier, because of the challenges in the back end of HDD drivers, and both the challenge getting stuff from DCs to stores, but of course getting stuff from producers and suppliers into DCs in the first place. The decision simply is, well, actually, it is simpler to do things. As you say, you will have more of the same type of one type of crisper, it is also a reflection of the challenges of when these things are coming in, it is slightly less organised, and we would like it to be, because you do not have as many drivers you have got to organise deliveries to come in when the delivery comes in. Sometimes they are not coming in on exactly the schedule you are used to, and a bit like the point John was just making, are the back end of a large retailer is incredibly optimised, too. Worth noting, of course, large retailers, an awful lot of them have convenience store formats as well, so they have all those same sort of things exist as well, albeit that they are a little bit more tied into where they are getting stock from. I think it is more that the decisions we are making will be made at probably a different level. John's members have that local flexibility that in the morning they can be like, right, I specifically need this thing and I get it, while from us it is more being that you have a central planning system that is looking across the board. That obviously does have that flexibility. The flip side is that it allows us to prioritise things like quality of access, so if there is a challenge in getting a particular item of stock, it will be shared across the whole estate, it will not just be in the central belt. I know that that is very, very important to rural members, because we have a lot of questions when we have had challenges. That is one of the real benefits we get from that. It is just these on-going, it is like the concertina almost, that one minute everything is fine, then it all squeezes and then comes back, and just trying to sort of bodge it as best as can be is the best way to put it at the moment. Colin, you talked about the possibility of looking at regional distribution hubs to face some of the challenges, but I am just wondering if there are any other bottlenecks in terms of Scotland's supply chain, in terms of the infrastructure that needs to be addressed, that currently is not being addressed? There is nothing to specifically say. Our members distribute across the whole of Scotland, so I think that 68 per cent of wholesalers are based in the central belt. The remaining are up into the Highlands and Islands, and those in the central belt also distribute all the way around Scotland up into the Highlands. The point in distribution hubs, or regional hubs, is to share resources and allow more local producers to distribute into one central point, maybe in Venice, and then one of our members would distribute down into central belt to others. However, it was also starting to look at the implications of Covid and all those minimum drops now, whether we don't just look at it for local producers, we look at it for nationals. I might not answer any question, but yeah. Anybody else get any concerns about the infrastructure that we've got in Scotland and maybe they need to address it? Just to get something on the record, I'm not too close to this, but I'm sure we could give the committee a bit more information. Again, just to get it on the record, I think that there's a long-standing issue about infrastructure and deliveries to island communities in Scotland. Long-standing and seemingly intractable issues around ferries. I know that that's becoming a bit politicised, so I don't want to get into it too much, but those problems are definitely there and have probably been exacerbated by the pandemic. It's more expensive to deliver to the islands. Companies seem to whack on a island premium, if you like. Of course, there's always the kind of vagaries of the weather and so on, but it's an on-going problem, and so really it was just to flag that up. It's a problem for the bigger supermarkets, it's a problem for convenience retailers as well. Just getting product to the islands in a timely fashion and making sure that they're adequately supplied is a long-standing issue in Scotland. Just to get that on the record. We've talked a lot this morning about staff shortages, whether it's HGV drivers, warehouse men, we've also previously heard about vets, hygiene inspectors, butchers, farm workers, terms of produce out of stock, short deliveries, longer lead times. We've talked about all the problems. What does the Scottish or UK Government need to do or should be looking at in order to address those things? John? I wish I knew, but we've mentioned earlier that anything that can keep costs down for businesses is welcome. However, purely from a convenience retailing point of view, and if that sounds like a plea for more funding, that's exactly what it is. I mentioned the Go Local programme earlier, funded by the Scottish Government, which is fantastic, really, really welcome. Moving towards net zero is a massive challenge for all of us. Retailers want to do that. They know that if they do it, it saves costs. However, the initial capex is always a problem. Anything that can be done to help with that is massively useful. A few years ago, we worked with Zero with Scotland to develop a really good programme to give small retailers grant funding for energy-efficient store refits. It was really, really successful. Obviously, budgets changed, things moved on. That programme is no longer up and running, but it was massively successful. If you can channel small amounts of money towards a small retailer, they can make that go a long way. They want to do it. I think that the store of the future is going to look very different in terms of net zero. It's going to be smarter and cleaner in terms of energy efficiency. There's a massive debate going on at the moment in the sector. It would be of no interest to normal people, but it's about refrigeration and whether you use airwall technology or whether you fit doors to your chillers. However, if you get that right, you can save 33 per cent of your energy costs, and retailers want to do it. However, as I said, it's just often finding that initial capex to make those changes. If there's anything that we could do around that, targeted programmes doesn't need a lot of money. The retailers can make it go a long way, but if there are those targeted things, those would go a long way to building resilience and helping us with the transition. At the risk of partner-repeating myself, there's probably a couple of things. The first one is a coherent labour strategy, both at the UK level and Scottish level. Something that ties in specifically to food and at the UK, looking at a food strategy, we've got a good food nation approach being taken in Scotland, a consistency, but ensuring that we have migration policies and things that reflect what we need from that. That's not meant to be a political comment. It's a reality that there are certain things that help drive the economy. I think there's a second point, which is one for government and industry, and it's that combined work on skills. That's not something that can be done by government in isolation. It's something our members do a lot on, but how we tie that and how we make sure that that happens at pace. I think one of the challenges our members find with skills training is that the structures we have, which are very, very worthy, aren't necessarily adapted to a retail world where things change every six months. I think I've gone through about four enormous transformational moments in the last five years. You see a huge adaption there, and it's how do we find a way that we can work with the right agencies and with that to make sure that we can do that. It's also about retailers making sure that the jobs are providing a good job. They're properly remunerated that we have the right conditions, the right approaches to make sure we're attracting really good people. That's something that our members traditionally put a lot of work in. That's something they have to keep doing, and it's not just for us to say, oh, it's terrible, we can't get people. Actually, there's a big requirement on are we offering the right package, are we offering flexibilities, are we offering the development, and are we creating diverse workplace? We have to do a lot of that too, and I think that's fair. Probably the final big thing, which might not sound directly relevant, part of it is a bit of economic growth, to be honest. A lot of the big challenges, which are worse, I would say, in Scotland at the moment, is that we've had absolutely dismal retail sales for the last 18 months and since the pandemic kicked off. Our most recent sales monitor was 11% down pre-pandemic when it falls down. It's very hard to deal with these challenges when trading is really difficult because you don't have that income coming in. A lot of these problems that are quite tough get reconciled a bit if you can get a bit of consumer spending and a bit of growth, which consumer spending and growth tend to correlate. That's a much bigger problem, but, thankfully, I'm not qualified to say exactly how we get the economy growing, but that would be the single biggest thing that would lift just a little bit of these pressures away. Can I just go back to the last point? My members up in the islands would be killing themselves. I didn't mention exactly what John had said. That supply chain piece is a problem. It is that there's higher on cost to serve into the islands and availability, obviously, as it's 70 per cent up on to the islands versus 85 per cent down in the central belt. Just going into support and ask of UK Scottish Government, I know that we've already mentioned the rates relief and discretion rates relief and the consequentials that will come through, just making sure that that comes through to Scottish wholesalers. Our sector is still working at about 80 per cent of pre-Covid sales, so we've still got a long way to go. It's about continued opening up of the markets, and we'll not get back to the same levels until we get the tourists back. I know that, obviously, that's not necessarily within your gift, but it all depends on the on-going outbreaks, but that would certainly help. Backing up what John was also saying in terms of the goal local is also in supporting the back-end, the wholesale supply chain and getting more of the local product into the wholesale channel, so continuing to support, delivering growth through wholesale and direct investment into wholesalers to get more products into our warehouses. As I said, the proposal is on the food and drink team within Government on their desk. The decarbonisation of the wholesale industry we've identified the challenges that our sector has. We've got a baseline of 111,000 tonnes of CO2 that we emit through our vehicles every year. 2,198 vehicles, 88 per cent of those fossil fuels, and 1,052 HGVs, which there is no solution at this point for getting to net zero. We are working with Arkley Energy, Scottish Power and other partners to look at what the solutions are and doing in trials and testbeds. It's about Government investment to continue to allow us to do that. We have asked Government within our project decarbonisation project report. There are six asks of Government, one of them being to recognise SWE, Scottish Wholesale Association, as being the sector lead for the food and drink industry. It certainly was in the decarbonisation of our fleets and used our learnings with the developers to share that across the sector. If we are serious about zero emissions, private sector will invest and I know that came out of COP26, but we can't do it alone. If private sector are left to do to find the solutions and invest on their own, all that will happen is that the big will do it because it can afford to and it will leave behind all the smaller businesses and there will be a complete competitive disadvantage and the big will just get bigger and the smaller. There needs to be a recognition that Government needs to support, especially SMEs and their journey, whether that be subsidising vehicles because a hydrogen HGV is four times more expensive and an electric one is two times more expensive. There needs to be a partnership between private sector, the wholesalers and the Government as we look to achieve 2045 net zero emissions. Can I turn to the subject of the impact of some of the issues that we have been talking about on our high streets when you cross my region? There are no cities yet, but there are lots of market towns, galloushields, Dumfries, Stranraer, Air Command, and they are all suffering from the same thing, which is a massive number of empty shops. Obviously, during the pandemic, digital shopping accelerated quite significantly. I wonder what assessments have been made of whether or not, as lockdown measures are lifted, whether that has continued to what extent or has it eased off? What are the implications for retailers, logistics and infrastructure of those trends? If there are any other policy initiatives that you have not touched on already, to support our town centres, it would be good to hear what those are. I will kick off with you because I appreciate you. You have a big list of policy initiatives that you want to give us. I feel transparency worth noting that, amongst the retail consortium, members are pure online retailers as well within that. We have both sides of the street, so to speak, within this. Briefly, to do a bit of the stuff on where we are seeing with high streets, we track football every month. That is down. It was 17 per cent last month, which was quite a good month. To be honest, it was down 20 per cent on that. We certainly did not hear positive things from last month, so that is pre-pandemic. There has been a big shift with home working, with the understandable reasons why people are not going back into the office, which means that we are not seeing people coming into town and city centres. Within that, we would say that the biggest trends have been high streets and shopping centres have been particularly hard hit. By that, the figures are a wee bit higher there. Out of town shopping areas have done a bit better. That is to a large degree in the short term because private transport is more convenient and people feel safer doing it. The type of stores in question are a bit bigger. Those are the physical retail trends. Digital has fallen back from the heights of last year. That is hardly surprising because we could not go into shops at that point. It is still up in the 40 per cent at the moment. It will be a bit bigger this month. November is always a big online month, as everyone does pretty Christmas. We get what used to be Black Friday, and it is now Black Friday month. I think it probably covers it a bit better. There is a really big digital element right now. In terms of the impact, vacancies are at a six-year high. As I mentioned already, retail sales have been pretty dire across the board for some time. We know particularly within a high street perspective the type of shops most affected by restrictions. Fashion is a great example. Those type of stores that were the so-called non-essential, they missed out on something like £4 billion in turnover in Scotland during the last year because they were closed for 220 days. It is quite a straightforward and comparative. There is good news. What is that customers are much more efficient in stores? In terms of how we reconcile that, in one case there is the artificiality. People will eventually, we hope, go back into two offices, go back to city centres, but there is an economic effect from not doing that. The second one, I have mentioned it before, but it will not surprise anyone the Scottish Retail Consortium thinks business rates are a problem since we talk about it all the time, but in all seriousness, for a physical retailer, if you are in a town city centre, those have often had much higher rates, certainly back in when the last revaluation was done. They will therefore carry fairly significant rates bills. They will, on top of that, many of them be subject to the higher property rate. It is worth noting here that Scotland's normal poundage rate is lower than the UK one, and the decisions have been real headway on keeping that down. Certainly five years ago it was tied to RPI, which was very punitive, but at the same time we do have a higher property rate, which affects those biggest properties, which is higher than elsewhere in the UK, and that is why the Barclay report said that should be reduced. I think within that, when we look at rates overall, revaluation should help with that, but it is still a huge burden and a huge challenge. Beyond that though, the one thing I think we haven't necessarily seen, that we have seen elsewhere, is particular customer incentives to try and encourage a bit of shopping, encourage people back into physical shopping. In Northern Ireland they have had a shopper incentive scheme, a £100 voucher to spend on the high street. The anecdotal data that we are getting back is unsurprisingly giving people free money was popular, but we have seen a footfall bounce. I think that we are probably seeing a sales bounce there. At the right time, those quite specific initiatives to actually get people back into the habit of going to town and city centres makes a really big difference. Just before I bring in John and Colin, can I touch on the supply chain issues around that? You mentioned earlier that when we go to shops we might not be able to get the same things for our Christmas dinner that we got in the past because of supply chain shops. Has there been any evidence so far, or is there a fear that people going into the high street can't get that product, can't get that size, can't get that item? I'm not going to do that. I'm just going to order it online because I will eventually get it if I do it online because I can't get it in the high street because of the supply chain issues. For a lot of our members though, I'd note that their online and physical businesses are very heavily integrated. One of our footwear businesses will say, look, if I get my sales through my store or through my website, I don't really care which way it happens, but what does affect them is what the incentives are set towards to incentivise those things or not. If I've got a very expensive, it's very expensive to run a physical business and my digital business is cheaper, I'll probably do more stuff for making investment decisions. I'll follow that way because my return is going to be greater. In terms of customers, there probably is a bit of that, but I would say that there's also the flip side is people order stuff online and they can often get it quicker in the shop so they'll actually pop in and at the same time they might do that. So our members are pretty cunning at trying to get people in the door in pretty much any way they can that that's appropriate. Okay, thanks. I suppose the same questions to John as well. Thank you. It's a really good question. In Scotland there are just over 5,000 independent convenience stores. That figure has remained broadly stable over the past 12 months. However, over the same period, we've seen a loss in the sector of about 5,000 jobs. In 2020, there were 47,000 people employed in the sector. That's dropped to 42,000 in 2021. Now, unfortunately, we don't have a lot of granular data, but we suspect that most of those losses have been in the town and city centre locations that you mentioned that have suffered the greatest impact in terms of the drastic reductions in footfall. So stores seem to be putting a massive effort into staying open, but one of the things that they've had to do is look at cutting staff numbers to remain in business. I think that this sounds like a very minor point, but one of the things that I think we could do in the future is how we're going to cope with a socially distanced world. There's been a lot of... Again, this sounds like a quite minor point, but we have to get... As we move towards encouraging more active travel and move towards people returning to town and city centres, I think that traffic management piece becomes really, really important because it's very easy to block through a road's redesignation or a new traffic management order or something that you block off the way that a convenience store gets its deliveries or the way that customers can actually access it. So there's a whole range, I think, local authorities could do to look at when they're trying to encourage active travel is to make sure that that doesn't impact on business. I might be wrong on this, but I think at the moment I don't think local authorities have to do a business impact assessment when they're looking at traffic redesignation. They have to do a whole range of consultation exercises, although I think a lot of them were suspended due to some emergency legislation that was passed while the pandemic was here. But I think traffic management, road designation, is a really big issue for small stores. So I think, as we kind of move forward, I think it was mandatory for local authorities to carry out business impact assessments on the road changes they're making, I think that would be quite a big step forward. That's very useful, yes. It's obviously easy to park an out-of-town development, but not necessarily in front of your convenience store, that's an interesting point. I suppose it's the same questions to Colin in terms of your members. Yes, I mean, John and Ewan have answered it, I think, pretty succinctly. Any impacts on the high street then filtered back up the supply chain in hours. So while convenience retail has been impacted, the biggest impact has actually been the closure of hospitality businesses within our sector, that we supply and that still aren't opening, but that then also has a bit of an impact on the retailers that we supply, because that means that our sales within our members have reduced and then the cost to serve is more. Certainly, I'm just picking up on John's point about the traffic management redesignation. That is a big concern of ours when we are supplying the convenience, we are supplying the hospitality on the high street and suddenly if you have redesignations and road closers or timed delivery slots, that makes it very difficult for us to manage our fleets and deliveries when we are good start off delivering in Glasgow in the morning and end up in Dundee in the afternoon, but actually suddenly we find that we can't do those deliveries because we can only get into a certain street in Glasgow between nine or seven o'clock in the morning and nine o'clock. A bit like we find in the Edinburgh festival, it causes a logistical challenge or a logistical nightmare and that's just one city. If we start and do road designations, city centre of Glasgow are looking to go or pedestrianised over the next 10 years or whatever it is. All three of us sit on the retail strategy group, I think the draft reports are out, but the whole report will be coming out shortly and that's got some solutions as to what industry think about how we can reinvigorate our high streets, town centres, etc. That will be an interesting read, I think. It's interesting, I mean somebody once described Dumfries Town Centre to me as it used to be the place you went to the shops and you maybe had a coffee and now it's a place you go for a coffee and you might go to the shops. I mean obviously hospitality is taking a bigger chunk of our high streets. I mean is it a case that our retail footprint and our high streets are just too big? I mean we need to accept that the impact of digital shopping has meant that we have to reduce that retail impact at our town centres. I'm very happy to answer that because the answer is quite straightforward. Yes, we'll have fewer shops. I'd caveat that two things. One, as somebody who also represents coffee shops, they're fantastic and we don't have a problem with them going into the high street, but I think more broadly the retail footprint is shrinking. It has been shrinking for a while. The Covid has done that. It's taken a lot of retail models that were probably pretty close to unsustainable and it's obviously taken them out and we can list the big brands who aren't on Princess Street anymore as a great example. It's not going to mean that physical shops aren't there and it's not going to mean some town centres don't actually maintain the same ones. There's going to be places that are vibrant and attractive and work well because they've got a good offering and it's about from a local perspective what's the reason that people come into town. If there's a great food offering, people will come in. They'll do a bit of shopping at the same time and that's great and if there's a more balance of hospitality versus retail, that's probably quite healthy. The fact that we used to have a big department store at the far end of Princess Street is now that the Johnny Walker experience, that's an evolution that's not necessarily problematic. Where I think it's challenging is where there's not reasons for people to go to high streets and our concern we've articulated a few times is that in less affluent places where you might not have those attractive reasons for people to go to places, that's the area of retail that's going to look and think actually I can cover that digitally and certainly from a national or multiple's perspective. Different for food of course because food operates differently but from a non-food perspective it's hard operating stalls at scale, it's costly and you have to have models that work and in the most cases work online as well but there's a couple of retailers in our membership who don't have online that they're quite rare and I always think it's worth noting that we get into this discussion of online versus the high street. The vast majority of high street retailers operate online as well that they've gone on the channel because it's the right way for their business so it's not straightforward I'm afraid. Alexander Burnett followed by Michelle Thomson Thank you convener. Now despite a lot of your inquiry understandably focusing on local issues it's clear the shortages and issues affecting the whole world, it's a global issue here. I'd just be interested in what solutions a panel has seen from elsewhere around the world and how informed are you say you're American or Asian counterparts and what are they saying and doing and feeding into their respective governments and I suppose as we end this session really just an opportunity for you to raise any solution you think might not have been raised already. I'm just going down round all the witnesses so John Ewan and then Colin please. Yes it's a really good question and clearly as I said there are global issues here, energy prices, product supply, ACV drivers, all of that. I have to confess I mean we are probably guilty of focusing perhaps too much on the local and we tend to focus more on local solutions but it's absolutely clear that we're not immune from these global pressures that you mentioned but I think in terms of convenience retailing it's probably that local focus where we would see most of the solutions. It's targeted government intervention, it's a realistic approach from local authorities to supporting their local businesses so really that probably is what we would focus on fundamentally. As I said earlier convenience stores can make a small amount of money go a very long way so I think the future for us is more of those targeted, costed, very focused interventions that will help to build resilience within the sector and make us slightly more immune from these global pressures that we've been looking at. Thank you. Thanks so retailers are kind of model works, works on scale across different places so a lot of the answers we'd see in other parts of the world on a broad level are quite similar. You want to look at skills training, you're wanting to look at what are the cost burdens, you've got that interaction between online. I think those things probably aren't that massively distinct. Different governments of course respond in different ways and it's hard to do the analogies. I'd say one of the things we're probably noticing is it's becoming harder operating cross jurisdiction when you have these particular challenges it's just an extra element of that and I think that's probably the bit where it's worth noting firstly that the decision by the UKICUP delay the checks coming in for products coming from the EU is very very welcome I think that would have been challenging. That is of course still coming we're going to have that process starting in January we know July next year physical checks sanitary, finer sanitary etc are coming now that's going to be really interesting what that does on one hand that's going to present challenges, perverting products and of course because there's a new level of non-tariff barrier but on the flip side it will reset that playing field to a certain degree at the moment obviously products that are coming in aren't subject to the same rules as those going out that's going to have quite quite big effects I suspect that exactly how that works out I am not a trade expert so I'm not really able to comment in much more depth but I would simply note that July's as good a time of year as if these things are going to happen for it to happen because of course we source most of our food domestically then. Thank you, I'm just going to say do you have any interaction with bodies in other countries similar to yourselves as there are for instance an American consortium, retail consortium or a state level one that you have any interaction with? So the main engagement we've had has been with Eurocommerce on the kind of European level that's always been the traditional way but we've done slightly beyond that we've tended not to be as focused in other parts we do of course have members who have either operate from there or headquartered elsewhere but we tend to be a little more British focused our regulator regime is so different that parts of that aren't necessarily analogous but we obviously our members are all the time seeing what's happening we have global retailers like Amazon and Ebay who are members of ours and they're looking constantly at how their operations adapt and work in different jurisdictions but it's surprisingly specific because the frameworks and regulations are are so distinct so there's some learnings but and the general principles of selling stuff and keeping customers happy work the detail is often quite difficult to reconcile across. Thank you very much and the original question to Colin. Yeah I mean I think in terms of us being able to look and speak to counterparts elsewhere in the world there isn't such a trade body elsewhere because wholesaling food and drink wholesaling in the UK is pretty unique and you know we mentioned this and I'm going to raise it I'm going to raise it but the challenges that we face in implementing the positive return scheme within Scotland is because there has been no other scheme in the world that has a distribution supply chain the way that we do not just in Scotland but within the UK so you know we don't have anyone who we can take learnings from we work closely with our counterparts at the FWD and Federation of Wholesale Distributors down south and their members who are also UK based or in service in Scotland are having the same challenges so you know what we have here is not unique this is a UK supply chain issue and that yeah everything we've described today is a challenge and that we need to work together on to overcome. Thank you very much for everything that's all convenient thank you. Thank you. Jamie Harcaw-Jawson did you wish to come in? Well I'll just it was just a question actually regards to you talked about the Highlands and Islands and all island issues and obviously I represent the Highlands and Islands we can sometimes feel at the end of any supply chain but but we know the kind of work that goes in there. Can I just ask I mean you know we've talked about specifics infrastructure what is it that you want to see improved specifically you know around some of those areas particularly around infrastructure and also if we don't see those kind of changes where are we like to be are we going to see perhaps some bodies pulling out of delivering to the Highlands and Islands are we like to see prices increase or just a limited choice? I'm happy to kick off on that I think I'll split that the kind of question from a grocery perspective those communities are still incredibly important the retailers who are there they have like long a strong local connections b that they're going to have a market that still works people in Orkney are still going to want to buy their groceries so so the necessity to stay there will remain certainly on that side of it in terms of off the transport links that you know road links matter they're very very important that the ferries and kind of points have been made as well so I think it is those kind of very traditional boring kind of infrastructure links that are big things that make a huge difference in non food that I would say the the challenges that that I tried to articulate earlier to Colin's question about is is that market sustainable for what's happening there is it going to move more to you know does digital work as much and that's very different in those environments sometimes digital doesn't work actually in in these more rural communities because it's it's not feasible to do it online margins tend to be very very low so a lot of the time you'll find retailers will will actually be reluctant to do a big digital service in some of these places because it's just simply less affordable that probably helps those local shops it to a certain degree they don't have the same competition that you might in in say Dumfries to pick an arbitrary example so I think there's probably a likelihood in those particular areas you continue to maintain that accepting that the challenges were facing are pretty intense can move on to Michelle Thompson thank you thank you good morning everybody what a fascinating session we've had just picking up on a few final threads I mean we've had a lot of chat through the session about cash flow and margins which I absolutely understand and that could lead to consolidation and so on but what I wanted to understand was in the light of proposals for 20 minute neighbourhoods and the vital role that retail particularly small retail outlets play in that what opportunities and or what risks do you see brought about by consolidation and the comments you've made about cash flow and margins for 20 minute neighbourhoods and therefore sustainability within that can we flesh that out just a wee bit more I know we've touched on each of the different areas but you would you like to go first but I'd like you all to answer that question yeah so I think with 20 minute neighbourhoods and the kind of planning framework there's a couple of things firstly there aren't a lot of retailers expanding their physical physical retailer state at the moment there are some when they're moving into other premises so I think that the provision you have at the moment is probably quite close to what's likely to be there there some who are of course but but that's within that so I think that probably from our perspective we'd say the way retailers evolving is that that hybrid model so if you're wanting to exist in within 20 minutes of all the things you need online probably going to play apart within that so if you're if you're in Edinburgh obviously it's less relevant but in other places it's managing that and accepting that digital actually works as a solution within this and particularly when you see that the way that these things have evolved not just in in kind of non-food goods but the way food goods and short-term stuff happening it's how do we find ways to make sure that those businesses are thriving and supported but also that the valuable back parts of them are being based up here too so the big change that the digital has is you don't have to set your you don't need a shop in every place so you can actually have a lot more flexibility where you're placing the big infrastructure and the valuable infrastructure the places that need those big supplies and important and that creates quite a lot of competition I'd say so thinking from an infrastructure and supply chain do we want these placed in Scotland do we want them placed the north of England both are relatively competitive in terms of covering these sort of areas so that's possibly it sounds silly to talk about the very local element of 20-minute neighbourhoods and then say actually this is a kind of national planning and tax thing but the two things interrelate surprisingly closely yeah it's a really good question I mean we first became aware of the whole emerging debate around 20-minute neighbourhoods about maybe just over a year ago and it was something that we became you know very very interested in because you know I think you can see that a local convenience store could play a massive part within that plan is it for a 20-minute neighbourhood I mean when you serve your local people you know the two amenities that they think are most important are a convenience store and a post office convenience stores provide very very local jobs most staff and convenience stores you know live within 10 minutes of other workplace you know most customers live within much less than a mile of the store so and not only that I mean a convenience store increasingly provides a lot of very kind of valuable services to customers post office ATM bill payments click and collect you know all of that so you could see that you know a convenience store would seem to be at the heart of that that whole agenda and I have to say I'm not trying to do anyone a disservice but the debate seems to have quite down quite a bit recently as far as I can tell I think the Scottish Government did set up a 20-minute neighbourhood unit I'm not sure which directorate it is in but and we did have some engagement with a few months ago but I have to confess I'm not sure how that whole agenda is developing but it would seem to be a very very interesting one and it would seem to be one that's you know very much worth pursuing you know as we look at more local as we look at you know reducing road miles as we look at you know making everything within within reach of of local people so yeah it's a very exciting agenda but I'm not I have to confess I'm not sure how far it's actually moving on within government at the moment I'm not just picking up on what John was saying I mean certainly we've been aware of the 20-minute neighbourhoods part of the retail strategy discussions and certainly wholesale plays an important part in that and you know the distribution of those local products and supporting as many of the local producers as we can and reducing those food miles which you know the local 20-minute neighbourhoods is about you know decarbonisation and that's what we need to be doing as the producers or as the suppliers into those neighbourhoods look. We're not going to have a wholesaler in every 20-minute neighbourhood we obviously supply across a whole of Scotland but it is just being recognising that we need to be doing our bit to ensure that what goes into those stores is sustainably sustainable locally and locally sourced as best as we can. Perhaps moving on from that we had a great quote earlier on about consumer behaviour and I can't remember which one of you said it you said we didn't anticipate people would keep buying televisions in terms of your modelling going forward and this is perhaps related also to to Covid perhaps you've been quite optimistic today in saying well if we get over the hurdle of 18 months can I just postulate to you if you could just allow yourselves to be somewhat pessimistic and say that we could be in a similar scenario with all the additional barriers that you've outlined with Brexit say in three years time I'm interested in how that might affect consumer behaviour because obviously there's a bow wave there's a time lag because you perhaps you're looking back to we've demanded stuff in terms of just in time and you know so perhaps if you could allow yourself to be a little bit pessimistic what would you like to bring out then that we perhaps might not have heard today across all the areas there John you're smiling at that you're obviously happy to be pessimistic worry such a Scottish thing isn't it no it's a it's a it's a good point to be honest what I'm more pessimistic about is forgive me but it's the it's the increasing regulatory burden on small business and convenience stores in particular I mean a convenience store is a very small space but increasingly it's becoming a very very highly regulated space and the burden of compliance and you know training and ensuring that that you are up to speed in legislation is becoming more and more onerous for a small small business for example recently we had implementation of something called Natasha's law which we had to do it's impossible to argue against given the tragic circumstances behind it but the implications for small retailers were quite quite considerable having to you know be able to accurately label everything in terms of ingredients and allergens and so on so that that's just the latest example and I don't want this to turn into a discussion about deposit return but that's you know that that is that is coming down the line so that regulatory burden is a massive issue and it only seems to be increasing I mean because when you think about a convenience store it's not just a small business really I think it's more useful to see it as a micro business because you know typically it would only apply about eight to ten people so the capacity of that micro business to deal with this you know increasing burden of legislation and compliance and legislation is it seems to be getting slightly worse all the time I'll just finish by saying I mean you could say that legislation creates a level playing field and it does to an extent but it's always easier for bigger businesses with bigger budgets bigger backroom operations bigger training budget centralised functions to deal with than it is for a for a small business so I suppose it's just about you know being aware of that and even if we could find a way of making sure that different parts of the kind of policy process spoke to each other when policy was being developed and implemented you know that would be that's very difficult if it wasn't we would have done it by now but it's just something to be aware of I think I'm not I'm not too pessimistic about the supply chain issues that they are but we will we will ride out that storm but there are underlying issues impact on the sector which I think it's very important that we don't forget about. So there's almost two angles I don't think I have ever a difficulty being being pessimistic the consumer side is really concerning 4.2 percent cpi h is very very worrying and and if the bank of england are right and that dispels back that's great if they don't need to take action suddenly these sort of actions we might be looking at even small increases in interest rates that a if obviously affects homeowners but b it affects anybody involved in borrowing whether that's commercially or that that creates these things can suddenly get away from themselves so so 4 inflation worries us on a number of levels because of course it shrinks that that consumer spending and we know consumers discretionary spending is pretty tight already and that's that's the input side you know if we're not getting sales if customers don't have anything that that makes it harder I'll leave aside where the big or small business is a best place to deal with with horrible regulatory burdens but I think we can safely say that that they can be challenging and I also recognise a lot of the time there's really good cases for doing it somebody sings that there's over there's lots of evidence for and something that is my kind of general plan and this committee does a lot of very good work on this it's been ensuring that the public policy interventions are proportionate and reasonable if you look at a measure for example like minimum pricing of alcohol there's a huge evidence basis that's a huge public health benefit it's easy for it's easy for us to reconcile if there's an economic thing we can understand but there's a huge other benefit then we get that rationale we understand it when the evidence isn't there when things aren't kind of put through that rigorous approach it's much harder to be honest so that's a good public policy that's well evidenced and is proportionate often will try and make it work and we really want to make those things successful I think you know that the immediate challenges are very difficult and particularly because if you have flat sales if you have costs coming up and you have the position we do where prices are at every sort of sticky price theory meaning they're not really going up at the same rate that can create enormous pressures on some businesses um if we don't get good Christmas trading I'm very worried that I may not have you know quite as many members in January as we do right now I would say against that though and I'm sorry to to flip back a little bit its optimism I think retail's been through in many ways may well have been through the worst of some of this already the last 18 months have been utterly brutal because we were having this huge transformation anyway in the industry as digital came and as customers changed as models changed that was happening and then we got absolutely hammered with all the restrictions of Covid the businesses that have come through that as markets do work and hyper competitive markets work the businesses that come through are very very efficient and effective I'd likely as a spectre succeed long term but I'm very conscious not all of the economy's possibly gone through that yet so if you want something to be really pessimistic about retail might not be the worst bit I get calling last few words yeah I mean the biggest concern I think we have is if we continue going the way we are and we with no restrictions potential lockdowns that's the biggest fear of our members another lockdown because we lost a lot of money at the start because of all the stock especially the fresh stock that we had to be wasted if this continues and we don't a get this the stock that we need but we're being forced to take volume that way we can't afford but the actually producers are cutting back on the number of skews as John said so the number of physical products are making and streamlining to produce only the fastest sellers it then becomes you know that we have a market that is basically all the same and that there's no competitive advantage or no competitive differentiation in the product offers that you know wholesalers rely on whether that be local or taking slower selling unique items from the manufacturers which they've now cut and actually a lot of John's retail stores and our members are reliant on own brand own label a lot of those own brand own label have been scrapped because it's the brand owners the big brands that are also producing the own labels they're focusing on just the brand not the own label so that's again you know another product out of John's shops out of our wholesalers so the biggest concern is actually we end up with a national supply chain that all of those you know the 90 percent of SMEs in Scotland are just going this is too tough we've not we can't differentiate we've got rising costs it's just a nightmare we're out in it with the nationals that will pick up that that business and that's the concern up on the islands that they are but the nationals and the supermarkets who operate on the islands can spread the cost to serve onto the islands across the rest of their the national the national business whereas if we've got one wholesaler well i've got three wholesalers in shetland and four wholesalers in shetland two in orny and they are the ones that are servicing the local convenience store the hospital the school you know the leisure hospitality you know if that wholesaler goes it'll be a national it'll pick up that and they won't have the same flexibility in dealing with it the hospitals are giving the same you know differentiation and dealing with local local producers on the island thank you i just have one final question that's probably more relevant to call in and witnesses last week who were ripped out in freight and transportation they did have concerns about the changes to new customer arrangements on goods coming from the eu from the first of january and they express concerns around that is that something that your sector is aware of and do you have any concerns about the changes that are coming up in the next month or so i'll be honest we our members don't necessarily import directly the the the use um the forwarders and carriers um so i'm i'm able to come back to you on that specific question but i don't have the enough knowledge at this point to to be able to answer that that's but and you and is it something that the retailers the book of retailers are concerned about i mean there's an enormous amount of work going going on making sure everything's kind of ready for that process and of course we have members who will will distribute products from scotland to north nile and as well so we're ready kind of having to work around those sort of systems and as i think i mentioned before there will be challenges in doing that um we're delighted it's not happening in december but obviously the physical checks coming in july will be the real test of how everything is kind of working then so there's a kind of grace period on that as i said there are going to be challenges of making that work but there probably isn't a good time to do it um and i guess with last call so we're very much hoping we're not dealing with with lockdowns or anything else that's challenging as that at the same time and can focus on it but we've also had a lot of notices happening and our our members are working very very hard they've also a lot some of them also have things like stalls and the republic of island stalls and the continent so they're already kind of familiar with with some of this stuff to start with but it will be it will be interesting okay i'd like to thank all three witnesses this morning for the time you've given us and for your expertise and your evidence so thank you again we'll close this part thank you we'll now move to agenda item three which is consideration of an ssi the committee has invited to note the diligence against earnings variation scotland regulation 2021 the regulations update the figures contained in part 3 of the debtor scotland at 987 which covers earnings harassment the scottish government has reviewed and updated these figures every year sorry every three years since 2006 this instrument was considered by the delegated powers and law reform committee on the 23rd november and no points were raised our members content to note the instrument thank you we'll now move into private session