Mars Inc has been accused of extending the time in which it pays suppliers in the UK through changes to its terms and conditions.
The Forum of Private Business has claimed the US food group is using a supply chain finance scheme to cover for an extended length of time it takes to make payments to suppliers.
According to the FPB, Mars is looking to double its supplier payment terms from 60 to 120 days but is “couching the extension within a new scheme that offers suppliers [a] chance to be paid a reduced invoice within ten days”.
Phil Orford, chief executive of the Forum of Private Business, said: “Whilst the Forum of Private Business is a great supporter of supply chain finance schemes in the right circumstances, they should not be used as a justification for a company extending payment times to its suppliers.
“We are concerned to learn that Mars UK is doing just this, extending payment times up to 120 days for some of their suppliers. Lengthy payment terms can be extremely damaging for small businesses.
“At a time when our economy is beginning to grow again it is fundamentally unfair that small businesses are being used as a line of credit for larger organisations.”
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Speaking to just-food today (19 May) a spokesperson for Mars UK confirmed it was making “changes to our supplier payment terms”.
The spokesperson added: “We really value our relationships with suppliers and are working with our partners on the changes. We are in the process of communicating the details of the new terms that we believe will offer suppliers greater flexibility.”