Blog: Dean BestEarly payment push

Dean Best | 6 February 2009

The recession in the UK has seen the return of one controversial topic to the spotlight, as attention is once again drawn to the sometimes-strained relationship between retailers and suppliers.

The subject was broached in this week’s Prime Minister’s Questions, when St Ives MP Andrew George called on the PM to "act swiftly to defend the interests of thousands of farmers and grocers who supply the larger supermarkets".

As economic conditions worsen and credit lines dry up, many suppliers are finding the going tough. In these circumstances, the delay between delivering goods and receiving payment can be make or break.

George said the practice of delaying payment is "damaging consumer interest and [is] to the detriment of farmers and growers both here and in the developing world".

Responding to these comments, Gordon Brown answered: “We are asking supermarkets to change their practice and introduce early payment to their suppliers."

With the government beginning to intervene in dealings between retailers and manufacturers, we are likely to hear more on this topic in the near future.

However, as yet, there has been little sign that the government is making significant headway on establishing an ombudsman to oversee the sector.

This was the most controversial issue to come out of last year’s Competition Commission investigation into grocery retailing in the UK.

It has raised hackles on either side of the fence – with retailers insisting that it is an unnecessary burden.

Indeed, if the government were to follow through with the plan during the downturn, from a retailer’s perspective, the timing couldn’t be much worse: the UK’s grocers will be expected to foot the bill when profits and margins are already under considerable pressure. 

To replay last Wednesday's (4 Febraury) PMQs click here.

Katy Humphries, Deputy Editor


Sainsbury's pulls the price lever

Sainsbury's, the UK's second-largest grocer, has set out plans for lower prices on a range of products, a move announced amid signs of pressure on its market share....


Intermarche broke rules with Nutella promo, French watchdog says

The pandemonium in stores of Intermarché as shoppers scrambled to grab jars of cut-price Nutella went viral - but the country's competition watchdog has announced the French retailer broke rules on se...


Big Food in investor spotlight this week at CAGNY

The senior management of a number of the major food manufacturers operating in the US will be in Florida this week for a key date on investor calendars....

Forgot your password?