''Greedy'' Sainsbury's increases payment times

22 October 2012

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22 October 2012 | Adam Leach

Supermarket chain Sainsbury's has become the latest company to be added to a ‘hall of shame’ that lists businesses extending the time they take to pay suppliers without negotiating a new contract.

The move comes after the Forum of Private Business (FPB), which represents small- and medium-sized UK businesses, learned from its members that Sainsbury’s agreed payment times for non-food suppliers would rise from 30 to 75 days. In a letter to the company, the FPB urged it to sign up to the government’s Prompt Payment Code, a scheme where companies commit to pay on time and not change payment terms for an existing contract.  

Robert Downes, policy adviser at the FPB, said: “Sainsbury’s might like to promote itself as the ethical supermarket, but when it comes to treatment of suppliers it is anything but. This kind of borrowing from suppliers, whatever their size, is scandalous, particularly from a profitable FTSE 100 company like Sainsbury’s, which is in no way financially challenged, but clearly just greedy.”

The supermarket said the move was made to bring the payment terms for all its non-food suppliers in line. A statement from the company said: “This change aims to ensure all non-food suppliers quote on the same 75-day terms. Many of our non-food suppliers are already contracted on this basis, although some others were historically on a 45-day payment term. Most of our competitors have 90 to 120-day payment terms.”

Sainsbury’s joins a number of household names in the ‘hall of shame’. Those already on the list include Dell, Argos, and Carlsberg.

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