Birmingham’s restaurant, hospitality and independent retail trade could be hit hard if Birmingham’s wholesale markets fail to find a new home it has been claimed.

Hotels, restaurants, caterers and small shopkeepers in the region will be forced to travel further afield and pass the increased fuel and delivery costs on to their customers.

Last week the Wholesale Market traders were told that the council is looking to move them off their Pershore Street site during 2013.

This was just days after the council cabinet decided to pull the plug on a deal to build a new wholesale market at Witton, citing the withdrawal of public funds due to the collapse of Advantage West Midlands and worsening council finances.

The market site has long been earmarked for redevelopment as part of the growing city centre and outlined in last year’s Big City Plan. But now there will be no cash raised from the sale of the site to help fund a replacement as was originally planned in the Witton deal.

Instead a private investor is being sought to wholly fund an alternative facility in the city, perhaps at Longbridge or Saltley, and it is not surprising the traders are far from optimistic that the new market can be delivered in two years.

The markets are a thriving community of 2,000 staff with truckloads of deliveries coming in, and vans shipping goods to small businesses and markets throughout the Midlands.

Sub-wholesalers in towns like Cheltenham, Leicester, Gloucester, Swindon and Wales stock up in Birmingham every day, and hundreds of corner shop keepers, take aways, restaurants and hotels pick up their fresh meat, poultry, fish, fruit and veg.

Mark Tate, of GP Perry fruit and vegetables and chairman of the trader’s association, said: “We are always busy. The Asian businesses rely on us.

"We supply the Chinese Quarter, people come from Handsworth for their Caribbean fruit and veg. And then there are the hotels, the caterers. Where will they go?”

The council argues that the market, which opened in 1973 is crumbling and needs to be demolished, but traders claim that despite being almost fully occupied, the decay is a result of decades of under investment.