MP slams firm over supplier payments

OLDHAM MP Debbie Abrahams has accused a major UK food manufacturer of “bullying tactics”.

Mrs Abrahams spoke out after hearing that Premier Foods is demanding payments from its suppliers under a so-called “pay and stay” scheme.

“Pay and stay” is when a large company demands a payment from its smaller suppliers. If the supplier refuses to pay it risks losing its contract with the business.

Mrs Abrahams said: “This is just another example of large companies using bullying tactics against small businesses by demanding money to finance their own existence.

“My Be Fair — Pay on Time campaign is fighting any method used by larger companies to pay late, avoid paying or finding ways to change pre-agreed contracts.

Threaten

“This tactic used by Premier Foods falls in to the last category and is blatantly unfair.

“They are clearly financing their own business by using small companies as a credit line.

“Premier Foods know they can use their size to threaten smaller businesses with losing their contracts.

“How ironic that this story should come to light a day before Small Business Saturday.

“One supplier to Premier Food has described this tactic as blackmail and I agree with him. It’s a disgraceful way to run a business.

“I have always said that issues around late payment is a leadership issue. It’s the chief executives and board members who set the tone of a company’s payment culture.

“It’s time that late payment was regarded as being as unethical as tax evasion.”

In response to the criticism levelled at the “Pay and Stay” scheme, Premier Foods, which owns brands such as Oxo and Mr Kipling, said they had been misunderstood and misrepresented but would simplify their procedures to avoid confusion.
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