10 April 2008
Alliance Boots has written to its key suppliers informing them it will take longer to pay bills and will cut 2.5 per cent from all invoices.
The letter sent by the integration finance team in January said that from 1 April, payment times would increase to a minimum of 75 days and transactions would be subject to a 2.5 per cent "settlement charge".
The Forum for Private Business, which received the letter from a member, said the move had caused outrage. Phil Orford, the organisation's chief executive, said the changes are indicative of large retailers "abusing their buying power". He added such action could impact negatively on smaller vendors.
The high street chain refused to confirm it had issued the letter and stated: "Our procurement strategies are in line with other groups of similar size and scale. We have always worked collaboratively with our suppliers."
The retailer recently changed purchasing chiefs and Patrick Dunne is now group head of procurement.