US seafood distributors seek to recoup debt via legislation
Distributors of seafood and other fresh foods praised new legislation that could help them recoup some of the billions of dollars in debt they are owed due to COVID-19 restaurant shutdowns.
U.S. Representatives Darin LaHood (R-Illinois) and Jimmy Panetta (D-California) introduced the Providing Liquidity for Uncollectible Sales (PLUS) Act on 21 July.
The legislation provides a tax credit to offset uncollectable debt incurred as a direct result of COVID-19 shutdowns, which amounts to more than USD 12 billion (EUR 10 billion) for the foodservice distribution industry.
The National Fisheries Institute (NFI), the United Fresh Produce Association, and the International Food Distributors Association voiced support for the legislation in a joint press release.
Because restaurants and other facilities were forced to shut down starting in mid-March, seafood distributors are owed around USD 2.2 billion (EUR 1.9 billion), the groups said.
“Family-owned seafood businesses support restaurants by providing fish on credit, but now are stuck with billions in debt owed them by these customers,” NFI President John Connelly said.
The legislation “will significantly help revive a complex system that brings seafood from water to table,” Connelly added. “If we don’t have functioning distributors bringing seafood to market, fish will simply rot on the dock, affecting everyone from boat owners to restaurateurs.”
Broadline foodservice distributors reported more than USD 5 billion (EUR 4.3 billion) in uncollectable debt, while fruit and vegetable distributors are also owed around USD 5 billion.
While many of the provisions of the CARES Act provided critical assistance for foodservice distribution companies, it did not account for large, unpaid debts for food that restaurants could not use due to COVID-related shutdown orders, the three organizations said.
“Tax credits for this USD 12.2 billion in outstanding debts will provide the liquidity distributors need to continue to extend credit to their restaurant customers and help them get back on their feet as the economy restarts,” they said.
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