Mars accused of delaying payments to suppliers

Small business organisations hoped to see details of changes earlier this year, but the signs are that an announcement will be made in the Queen’s Speech covering legislation in the run-up to the election.

The forum introduced the Hall of Shame in response to members’ pleas to identify the worst offenders. Just over 30 are on the list.

Some of the companies most recently added to the late payment list, including Debenhams, GlaxoSmithKline, Premier Foods and Monsoon Accessorize, have been named because they have used variations of the carrot-and-stick approach involved in supply chain finance schemes.

Phil Orford, the forum’s chief executive, said that while the organisation supported 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”.

He added: “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 delays can be extremely damaging for small businesses.

“Whilst the supply chain finance scheme allows them to be paid quicker, it is at a cost. If suppliers want the full notice they are entitled to they will have to wait 120 days.”

The forum has written to Mars to clarify the extent of the changes for suppliers before making a decision on a hall of shame entry.

Mars UK said: “We can confirm that we are making changes to our supplier payment terms. 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.”

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