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21 February 2012 | Angeline Albert
Grocery company Waitrose has defended a move to fine suppliers for delayed delivery of products – a move that a business association argues hurts smaller vendors most.
Since the summer, Waitrose has been deducting money from suppliers’ trading accounts by charging £60 for every late delivery, a practice that has been condemned by the Forum of Private Business (FPB).
Senior policy advisor for the FPB Phil McCabe told SM: “It’s disappointing that Waitrose is using the stick in this way. It should be building relations with suppliers through dialogue and more understanding. It seems to be typical of the attitude of retailers to small suppliers. By squeezing them in this way, some will go under.”
Small suppliers often consolidate their loads by sharing a logistics company, but Waitrose is charging every supplier with goods on each truck.
McCabe added: “Retailers in general have been guilty of paying late, so it’s rich that a large retailer can charge suppliers for lateness.”
To compensate for the loss, the FPB said suppliers could respond by raising their prices.
A Waitrose spokeswoman said: "Late deliveries cost us a significant amount of money. It is only fair that late suppliers contribute to that and £60 fairly represents the cost to our business. We do not profit in any way from it – it goes in some way to cover the cost of deliveries being late. The £60 charge is calculated as an average cost of late supplier deliveries. It is, in fact, considerably short of covering the annual cost to our business of late supplier deliveries."