Keep ‘em coming

12 July 2007

A question posed by a reader:

"My company has a long-term non-contract arrangement with a critical supplier. The supplier is threatening to cease deliveries unless we agree to an immediate 20 per cent price rise for each consignment. What can we do?"

Advisers told us:

• the first thing to do is call a face-to-face meeting to establish the reasons for such a price hike

• try to negotiate a notice period before a price increase applies, to consider the options

• assess the situation quickly – compare prices with sister companies in the group, if you have them, get quotes from alternative suppliers and talk to your peers

What do you think?

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