Drinks giants join the late payment 'hall of shame'

27 February 2009

Anheuser-Busch InBev (AB InBev), the world's largest brewing company, has increased its supplier payment terms to 120 days.

In an email sent to suppliers, and seen by SM, the drinks giant said "as from now" the 120-day billing period will be applied to suppliers of services, spare parts and capital expenditure projects globally. The Federation of Private Business (FPB) said this was double its previous terms.

An AB InBev spokeswoman said the challenging global economy was a factor in the review of supplier payment terms. "We will do what we can to help them with the transition."

At the same time Diageo, owner of Guinness, also increased its supplier payment periods. It moved to a standard payment term of 60 days for its occasional, non-contract suppliers, which extended the previous period by up to 15 days.

"Just 1 per cent of [the 25,000 plus] suppliers who received this letter have expressed any concern," a Diageo spokeswoman said.

The action is at odds with the UK government's "Prompt Payment Code", to encourage businesses to speed up payment to small companies amid fears suppliers already struggling could fold (Web news, 11 December 2008).

AB InBev and Diageo are the latest additions to the late payment "hall of shame", according to the FPB.

More than 20 companies have been added to the blacklist since 2003. FPB chief executive Phil Orford wrote to the two companies about the detrimental effect the billing changes could have on vendors. He urged AB InBev and Diageo to join the payment code.

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