Supermarkets urged to speed up payments

15 October 2008
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16 October 2008 | Andy Allen

Rural affairs secretary Hilary Benn has called for major supermarkets to speed up payments to suppliers - amid fears the credit crunch could harm small firms.

Benn met representatives of the big supermarkets this week, asking them to pay more quickly and improve cash flow for small businesses. Ministers fear small suppliers will increasingly depend on prompt payments for survival.

"Small businesses are far more susceptible to the timing of payments than larger companies," said Benn. "A single late payment can be the difference between survival and collapse. That will be truer than ever in the coming weeks and months." Business secretary Peter Mandelson said helping small and medium sized businesses through the downturn would be the priority in his new post (Web news, 7 October). Prime minister Gordon Brown has also announced the government will work to pay small suppliers more quickly.

Meanwhile the Federation for Small Business (FSB) warned large businesses are increasingly delaying payments to suppliers to improve their own cash flow. It added suppliers were often unwilling to take legal action against such behaviour for fear of damaging relationships with buyers.



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