Sainsbury's increases non-food supplier payment times to 75 days

Supermarket chain Sainsbury's has been named by the Forum of Private Business for having increased all non-food supplier payment times from 30 to 75 days.

The supermarket told those affected last month by letter that it was set to make the dramatic increase following a review which found their standard 30-day payment times differed from industry standards.

The Forum has written to Sainsbury’s to ask it to sign the Government’s Prompt Payment Code, subscribers to which pledge to pay suppliers on time, and not to change terms and conditions mid-way through a contract.

Said Forum policy advisor Robert Downes: "Sainsbury’s might like to promote themselves as the ethical supermarket, but when it comes to their treatment of suppliers they are anything but.

"No right thinking person could justify what Sainsbury’s is proposing – a 150 per cent increase in the time it takes them to pay a supplier for goods provided – as being fair and decent.

"With startling arrogance they have then tried to justify this increase by claiming 75 days is the industry standard. This is utter fabrication.

"This kind of borrowing from suppliers – whatever their size – is scandalous, particularly from a profitable FTSE 100 company like Sainsbury’s, who are in no way financially challenged, but clearly just greedy."

Research carried out by Bacs has shown around £37 billion is owed to small firms in unpaid invoices in the UK at any one time.

Downes added: "When suppliers receive a letter like the one Sainsbury’s sent out, few have any choice but to agree to the new payment terms. There is little room for bargaining through fear they will lose the business, and no small firm in the current economic climate wants that.

"For the sake of small businesses and the economy, the Government must prioritise tackling the culture of poor payment, addressing the bully boy behaviour of these bigger companies.

A Sainsbury’s representative said: "We have written to our [non food] suppliers about our intention to bring their payment terms more in line with the rest of the industry. This will be followed up individually with any suppliers experiencing difficulties in meeting this change. We are fully committed to ensure all payments to our suppliers are made on time."


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