Last week, the UK government confirmed that it will step in to prop up the trade credit insurance market, bringing welcome relief to GIMA members and other suppliers within the garden retail sector.
Trade credit insurance is a contract bought by suppliers to make sure they get paid even if their customers default and cannot pay the bills. British garden retail suppliers will now be able to access vital insurance more easily following this latest Government intervention during the ongoing Coronavirus pandemic.
The latest announcement confirmed that by the end of May, the government will provide guarantees for all currently available trade credit insurance. The Treasury confirmed that whilst final details are still being worked out now, the final agreement will see risk shared “appropriately” between the government and insurers. This backing will provisionally run until the end of this year.
There had been fears that insurers could remove cover on companies as the COVID-19 crisis threatens business survival. The Treasury was also concerned that premiums for existing trade credit insurance could rise to unaffordable levels.
Vicky Nuttall, GIMA Director, commented “GIMA welcomes the government-backed trade credit insurance guarantee which will help to ensure the continued supply of product, and more importantly cash, flowing through our industry. At a time when suppliers are in desperate need of payments, this additional guarantee will give them the confidence to continue to trade.”
The government backing mirrors similar action being taken by other countries across the world, which are facing the same issues as the UK trade credit insurance market in these exceptional times. If developed in the right way, this temporary scheme will give reassurance to the thousands of businesses who rely on the security that trade credit insurance cover provides.
Commenting about Garden Centres reopening Vicky Nuttall also added: “This is certainly a week of good news as we also saw garden centres across England and Wales throw open their doors once again, following the government giving the green light for them to reopen. Praise has to be given to all those that campaigned hard for this, and in doing so placing garden centres front and centre within the national press. I’ve no doubt that this coverage will see new consumers visiting their local centre, especially as so many have been engaging with gardening on an unprecedented level during lockdown. Whether gardening to alleviate boredom, to improve mental and physical health, or to keep the kids entertained, gardening has never been so popular, and I hope we can continue to inspire this new audience, as well as continuing to service existing green-fingered consumers. It’s such a significant opportunity for the entire garden retail sector and one I am sure we can maximise as we move forwards.
“Of course, the reopening of garden centres does not come without its challenges and it would be remiss of me not to mention them. Dealing with the pent-up demand, managing the customer flow and keeping employees and customers safe isn't going to be easy, which is why we need to move cautiously and share experiences to ensure we’re all demonstrating best practice. With the eyes of the rest of the retail world on garden retailers we cannot afford to make mistakes.
“GIMA members and the wider supplier network are ready to support garden retailers, with some in desperate need themselves for the supply chain and payments to start flowing again. There's also still work to be done to save UK ornamental growers, many of whom have lost a huge swathe of business already this year and will not be able to make up for the loss. Now, more than ever, it’s so important that we continue to work together as an industry and make sure we come out stronger and more united at the end of it all."
For further information please contact GIMA on (01959) 564947 or firstname.lastname@example.org