27 May 2014 | Gurjit Degun
Claims last week that food giant Mars UK is trying to cover up doubling its payment times for suppliers has again highlighted the problem of late payments.
The Forum of Private Business (FPB) said the food manufacturer is the latest company to introduce a supply chain finance scheme, or a “cover for extending payment times”, and suggested Mars UK could be placed in its late payment hall of shame.
The FPB’s hall of shame includes other well-known brands such as Monsoon, Debenhams, GlaxoSmithKline and Premier Foods. So Mars UK would be following in the footsteps of other major companies.
Construction companies are notoriously bad with regard to late payments. However, the industry is taking steps to change this with an announcement last month that nine major construction companies have committed to ensuring their suppliers are paid within 30 days with no retentions, by 2025. It’s slow progress, but it is a move in the right direction.
But the charter needs more signatories to be a success and it remains to be seen what impact the Mars UK actions will have.
The government recently consulted on late payments and is due to release a response in the coming weeks. The FPB’s chief executive Phil Orford believes that Mars UK's actions “couldn’t be better timed to demonstrate to government this is an ongoing and serious issue”.
But has the issue spiralled too far out of control for even the government to step in and regulate?