Suppliers hit hard by Christchurch business closures

Ngaire Baker of Christchurch based gourmet food retailer and wholesaler Mercato Photo / Amanda Cropp

The February earthquake is having a damaging ripple effect with downstream suppliers hard hit by the continued closure of Christchurch food outlets, hotels and resthomes.

Christchurch Hospitality Inc, a group set up to represent local hospitality businesses, estimates that 281 of its 381 members are not operating and that has meant a dramatic drop in income for a wide range of suppliers.

Wholesaler Angus Meats has lost between 75 and 80 customers and proprietor Bernie Connolly says turnover is down about 20 per cent.

"Some of them have come back on line but some will never come back. The big problem is that a lot of them owe money and we won't get it (back). Some people have contacted us and said 'look we'll square you away, we're just having to wait for our insurance payment,' but if they're anything like us they'll be waiting a while.

"We haven't been paid out (fully) for the first quake and our insurance company has gone belly up so we're hundreds of thousands of dollars out of pocket."

Lost accounts include eight to 10 resthomes and Connolly says making up for lost income is hard.

"We're trying to find new customers but the trouble is you are taking it off someone else who is in situation not much better than you are."

Mark Dillon, owner of Aroha elderflower drinks, supplies about 500 outlets throughout the country but Christchurch accounts for almost half his sales and most of his local customers are inside the Civil Defence cordon around the CBD.

Dillon began exporting to Asia and Australia late last year and overseas sales may well play a crucial role in keeping him afloat.

"If you have everything in one basket and that basket gets knocked over in unforeseen circumstances it puts the kybosh on things. If you have a few different strings to your bow it adds resilience to your whole operation."

Ngaire Baker, co-owner of Mercato, a gourmet food retailer and wholesaler, says the earthquake forced them to rethink the way they run their business.

Mercato is the sole New Zealand distributor for Thermomix, an upmarket food mixer and cooker, and Baker says while their business was inside the cordon she was unable to dispatch Thermomix orders to customers.

"We're thinking about an off-site storage facility, perhaps in the North Island."

To make up for loss of custom from the 30-plus high end restaurants Mercato used to supply, Baker has turned her cooking school demonstration kitchen into a café catering for business refugees from the CBD.

"The BNZ that shut last year has reopened down the road with 150 staff and an advertising agency has moved in upstairs. Suddenly there's a whole lot of business people in the area that need food, so rather than cooking and demonstrating we're cooking and selling."

Vegetable wholesaler G.H. Morris and Sons has opened a stall at the Riccarton Market to help compensate for a forty per cent drop in turn over arising from hospitality industry closures.

But owner Daryl Morris says in some ways the earthquake has been a blessing in disguise, forcing him to stop "running around after the wee customers that cost you money."

"I'm concentrating on the ones I've got left and everyone has been paying me on time, and instead of paying monthly they're paying weekly."

Morris is hopeful that things will improve over the coming months as big operators like the casino reopen. "By the time Christmas comes along and if people who say they'll be open then are, then we'll be away laughing."