Sainsbury has sensationally postponed the introduction of new payment terms for 100 of its suppliers following a barrage of opposition to the changes.
The retailer sparked an outcry last month when The Grocer revealed it had written to 1,900 suppliers informing them that it would in future be paying its bills up to four weeks later than usual (January 29, p4).
The move also came just weeks after the retailer made non-negotiable demands to cut invoice prices.
Sainsbury has now granted suppliers who have complained about the changes a last-minute reprieve, but will press ahead with the controversial plans for those who haven’t from Monday (March 7). It means that 1,800 of them will join more than 6,000 other Sainsbury’s suppliers who are already waiting between 40-60 days for payments.
The Office of Fair Trading this week announced it had been in discussion with Sainsbury and that the supermarket had written to the complaining suppliers in an attempt to reach a settlement. If the problems cannot be resolved, suppliers can go to independent mediation, said the OFT.
Trading director Mike Coupe insisted the number of suppliers being granted the reprieve was “very small”. He told The Grocer:
“This just reiterates the fact we are following the supermarkets code of practice.”
The payment changes were simply to bring all of its suppliers on to the same standard contract, said Coupe, and Sainsbury would be negotiating with suppliers on an individual basis. “The payment terms that will be introduced are still less than some of our competitors. If there is no resolution, there is a process of arbitration and mediation.”
The OFT stepped in after being contacted by the NFU and FPC on behalf of suppliers.
Amid the controversy, the OFT also announced it would publish the results of its audit of supermarkets’ compliance with the supermarkets code of practice in the next few weeks.
The OFT said it had taken “no view” on whether Sainsbury’s actions had breached the code, which states “reasonable notice of a variation of supermarket’s terms shall be given to the affected supplier”.
Amy Balchin & Liz Hamson
The retailer sparked an outcry last month when The Grocer revealed it had written to 1,900 suppliers informing them that it would in future be paying its bills up to four weeks later than usual (January 29, p4).
The move also came just weeks after the retailer made non-negotiable demands to cut invoice prices.
Sainsbury has now granted suppliers who have complained about the changes a last-minute reprieve, but will press ahead with the controversial plans for those who haven’t from Monday (March 7). It means that 1,800 of them will join more than 6,000 other Sainsbury’s suppliers who are already waiting between 40-60 days for payments.
The Office of Fair Trading this week announced it had been in discussion with Sainsbury and that the supermarket had written to the complaining suppliers in an attempt to reach a settlement. If the problems cannot be resolved, suppliers can go to independent mediation, said the OFT.
Trading director Mike Coupe insisted the number of suppliers being granted the reprieve was “very small”. He told The Grocer:
“This just reiterates the fact we are following the supermarkets code of practice.”
The payment changes were simply to bring all of its suppliers on to the same standard contract, said Coupe, and Sainsbury would be negotiating with suppliers on an individual basis. “The payment terms that will be introduced are still less than some of our competitors. If there is no resolution, there is a process of arbitration and mediation.”
The OFT stepped in after being contacted by the NFU and FPC on behalf of suppliers.
Amid the controversy, the OFT also announced it would publish the results of its audit of supermarkets’ compliance with the supermarkets code of practice in the next few weeks.
The OFT said it had taken “no view” on whether Sainsbury’s actions had breached the code, which states “reasonable notice of a variation of supermarket’s terms shall be given to the affected supplier”.
Amy Balchin & Liz Hamson
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