Sir Stuart Rose has launched a staunch defence of Marks & Spencer's controversial new Project Genesis food and drink trading terms.

Speaking after he had addressed this week's National Farmers' Union conference, the Marks & Spencer chief executive told The Grocer: "I do not believe there's any issue where a supplier will be worse off having done more business with us. If there is such a case clearly we wouldn't ask them to do that.

"Do I think it's wrong that as you develop more volume with a supplier you make sure you're more efficient and share the benefits of that?

"No, I think that is perfectly reasonable and it's a perfectly established retail practice. It's established in the food industry for many years, it's established in the textiles industry, so I'm absolutely clear on that."

Under the terms, which have been seen by The Grocer, suppliers face a 2% cut in prices across the board and further cuts up to 3.5% based on how much their sales grow with Marks & Spencer. There will also be a 1.5% central marketing charge on all invoices.

Costs of raw materials had rocketed in the past year, he told delegates, but the changes in contracts were "not a reaction to tough trading".

"It's actually good business sense," he said. "We've had some 20% growth already in the last two years and our suppliers are benefiting from increased volumes and therefore revenues, and we would like to see this continue as we continue to grow our business.

"So we have updated our food supplier terms to make them more transparent, more closely aligned to growth as we continue to invest in our business. We are not changing our payment terms and they remain among the best, if not the best in the industry."

Marks & Spencer paid all suppliers within between 10 and 25 days, he claimed. "There are many benefits of being an M&S supplier and we want it very much to be about partnership. "Some of the suppliers we've been with for many years and in at least two cases for more than 40 years."

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