“Supply chain” bullying for small businesses needs to stop
A poll conducted by the Federation of Small Businesses (FSB) suggests that one in five small businesses have faced “supply chain bullying” in the last two years.
The survey included around 2,500 businesses and found 5 specific problems that are resented highly among small businesses; they are:
- “Pay to stay” charges which are required to be on a supplier list
- Excessively long payment terms reaching 90 or sometimes 120 day payment terms
- Exceeding the agreed terms or changing the terms retrospectively
- Some large firms give themselves automatic discount for paying early
- Companies that seek to apply discounts to outstanding money retrospectively, thus changing the terms of the contract
The FSB are calling for a toughing up of prompt payment and for measures to be taken to stamp out the worst examples.
John Allan, FSB national chairman says: “When the public think of their favourite brands, they are unlikely to connect them with the sort of immoral practices which are becoming all too common across an increasing number of industries. However, it is clear that whenever these examples come to light, the public shares the same sense of moral outrage as the small firms that have to put up with them on a daily basis.”
The Department for Business, Innovation and Skills (BIS) said: “This behaviour is unacceptable and we want it to stop. Many small suppliers feel they are being exploited and we are acting to see that this changes. Large companies need to behave responsibly and should not be using their financial clout to mess their suppliers around.”