Thousands of small and medium-size Midland traders could suffer a crippling 40 per cent increase in their overheads if Birmingham Wholesale Markets are forced to close, according to a research document.Birminghams growing reputation for fine dining would be placed at particular risk, with restaurants having to increase prices by a minimum of 2 a dish after losing access to cheap market produce.
The Essential Catalyst study, by Technolink UK for the 73 market trading companies, paints a bleak picture of the economic impact if Birmingham City Councils plans to redevelop the Pershore Street site triggers the end of the Wholesale Markets.
Michelin-starred Birmingham chef Glynn Purnell has added his support to the markets, warning that prices would rise if traders had to go further afield to buy stock.
One of the largest of its kind in Europe, the markets employ 1,100 people and have an annual turnover of 275 million.
But the study adds that when the impact on the supply chain is taken into account, the markets support 15,000 jobs in the wider economy.
The figure, which is as large as the number of jobs at risk when MG Rover collapsed, has been disputed by the city council.
Leaders of the councils Conservative-Liberal Democrat coalition say they will work with traders to find a new home for the markets.
But a planned out-of-town move to Witton fell through earlier in the year, and the local authority, which has to find spending cuts of more than 400 million, has made it clear it is unlikely to be able to fund any relocation.
The study claims that protracted uncertainty by the council over redevelopment options for Pershore Street has put off new traders from moving to Birmingham and caused the markets occupancy rate to fall to 75 per cent.
Council statistics suggest that about 5,000 independent local businesses use the markets to buy produce, although the study puts the figure at 7,500.
The report warns: Given the price differential between wholesale and retail sourced goods, the small independent sector is particularly vulnerable to what would amount to a price shock of a magnitude of 30-40 per cent, excluding transport costs, if access to the Wholesale Markets became constrained.
Such a price shift would not only jeopardise employment opportunities but the actual commercial viability of many of these SMEs.
Mr Purnell, of city centre restaurant Purnell’s, warned the cost of restaurant meals was bound to rise if the markets closed.
Mr Purnell added: If I had to go to Manchester, Bristol or London, I couldnt put a lunch menu on for 26.
The markets are part of Purnells, they are part of why it works, we rely on the markets.
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