January 27 2015
Another drinks giant has been criticised for unilaterally imposing extended credit terms on suppliers. Diageo, the owner of brands such as Guiness and Johnny Walker which previously took 60 days to pay has written to suppliers to inform them that they will have to wait 90 days in future. This development was exposed by the Forum of Private Business and reported in the Telegraph.
The company is a signatory to the governments’ ‘prompt payment code’, which has left some industry commentators wondering whether this scheme has any value at all.
Phil Orford, Chief Executive of the Forum of Private Business:
“At a time when the economic outlook remains uncertain it is fundamentally unfair that small businesses are being used as a line of credit for larger organisations and propping up big business.”
“This is yet another example of the supply chain abuse that threatens to break the backbone of the British economy – small businesses. The need for assertive action from policy makers to fix the broken big business ethics culture in the UK is self-evident.”
Sam White, Chief Executive of My Credit Controllers said:
“While Diageo is not paying late, this trend where larger businesses impose extended credit terms as a precondition of doing business with them results in yet more stress on the cash flows of smaller businesses.
We can help. Our outsourced credit control service offers smaller businesses a professional credit controller as part of their team. Alternatively our online debt collection service allows you to easily and quickly call in our help on a single overdue invoice.”
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