Co-op Group under pressure to repay £80m of government funding
The Co-op board will reportedly meet next week to discuss handing back millions in government cash it was handed during the pandemic.
The move would follow in the footsteps of leading supermarkets who returned business rates relief at the end of last year and have pledged to forgo the break announced in the Budget.
The board would be under “enormous pressure” if it were to keep part or all of the £80m of funding while handing out bonuses to top executives, according to Sky News.
“As well as the business has been managed, there is no way they can pay bonuses and keep taxpayers’ money,” a person familiar with the matter told the broadcaster. “It would be catastrophic for the brand.”
Co-op could repay the portion of state aid received by its food retailing business.
Co-op first came under pressure before Christmas after Tesco became. thefirst major retailer to announce it would repay business rates relief. Aldi, Asda, Sainsbury and Morrison’s quickly followed suit.
At the time Sky reported various individuals on Co-op’s National Members Council were pressing for the group’s board to make an immediate pledge to waive the government windfall.
A £150m lump sum generated from the Co-op’s insurance arm, as well as the group’s decision to plug cash into a new entertainment arena in Manchester, increased the pressure.
At the time the company said: “Given the huge uncertainty we’re facing into still and the ongoing costs we are incurring, we’ll consider our approach in terms of the government support we’ve received at year-end.”
Co-op declined to comment.