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| Squeeze on suppliers blamed on excess debt | Squeeze on suppliers blamed on excess debt |
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| Some firms are putting a punitive squeeze on their suppliers because their private equity owners have loaded them up with too much debt, supermarket supplier Finsbury Foods’ boss John Duffy claimed yesterday. | Some firms are putting a punitive squeeze on their suppliers because their private equity owners have loaded them up with too much debt, supermarket supplier Finsbury Foods’ boss John Duffy claimed yesterday. |
| The boss of the cake and bread-maker said well publicised bust-ups between supermarket suppliers and their own, smaller, suppliers over payment terms were not simply the result of the fierce supermarket price war. | The boss of the cake and bread-maker said well publicised bust-ups between supermarket suppliers and their own, smaller, suppliers over payment terms were not simply the result of the fierce supermarket price war. |
| “It’s a long-term trend. It’s usually more linked to leverage and balance-sheet weakness than anything else,” Mr Duffy told The Independent. “If you have a lot of debt, paying that down is a priority. Some of the businesses … are going through difficult trading or have private-equity owners getting cash to pay down some of that debt.” | “It’s a long-term trend. It’s usually more linked to leverage and balance-sheet weakness than anything else,” Mr Duffy told The Independent. “If you have a lot of debt, paying that down is a priority. Some of the businesses … are going through difficult trading or have private-equity owners getting cash to pay down some of that debt.” |
| US consumer giant Heinz, owned by billionaire US investor Warren Buffett and private equity firm 3G Capital, has doubled the length of time it takes to pay small British suppliers, it emerged this week. Premier Foods and 2 Sisters have also both been accused of making unfair financial demands of their suppliers recently. Stella Artois and Boddingtons owner AB InBev has also been under fire. The Surrey-based systems supplier Brewpack claimed AB was taking up to four months to pay its suppliers. | US consumer giant Heinz, owned by billionaire US investor Warren Buffett and private equity firm 3G Capital, has doubled the length of time it takes to pay small British suppliers, it emerged this week. Premier Foods and 2 Sisters have also both been accused of making unfair financial demands of their suppliers recently. Stella Artois and Boddingtons owner AB InBev has also been under fire. The Surrey-based systems supplier Brewpack claimed AB was taking up to four months to pay its suppliers. |
| Mr Duffy, whose firm makes cakes for Thorntons, Nestlé and Disney, said there should be “more transparency than people are comfortable with” from suppliers, to combat bully-boy tactics in the food supply chain. | |
| The Federation of Small Businesses claims one in five small businesses has been subject to some form of abuse. The body will today meet in Westminster to discuss supply chain bullying with an all-party parliamentary group. | The Federation of Small Businesses claims one in five small businesses has been subject to some form of abuse. The body will today meet in Westminster to discuss supply chain bullying with an all-party parliamentary group. |
| The revelations come at a fraught time in supplier relations. Mr Kipling and Oxo- owner Premier Foods climbed down over demands for cash it made from its suppliers over its “pay to stay” policy in December. Fellow supermarket supplier 2 Sisters has also faced allegations it has been taking up to four months to pay up. | The revelations come at a fraught time in supplier relations. Mr Kipling and Oxo- owner Premier Foods climbed down over demands for cash it made from its suppliers over its “pay to stay” policy in December. Fellow supermarket supplier 2 Sisters has also faced allegations it has been taking up to four months to pay up. |
| Tesco, which is battling German discounters Aldi and Lidl to offer low prices, is under investigation by the Serious Fraud Office over its treatment of income from suppliers, which led to its £263m accounting scandal. | Tesco, which is battling German discounters Aldi and Lidl to offer low prices, is under investigation by the Serious Fraud Office over its treatment of income from suppliers, which led to its £263m accounting scandal. |
| Debbie Abrahams, the Labour MP who is hosting today’s meeting in Westminster, said: “I have always maintained that a late-payment culture … is set at board level. That makes it a leadership issue and it’s time that deliberately paying late, finding ways to pay late, or making unilateral changes to pre-agreed contracts is seen as being as unethical as tax evasion.” | Debbie Abrahams, the Labour MP who is hosting today’s meeting in Westminster, said: “I have always maintained that a late-payment culture … is set at board level. That makes it a leadership issue and it’s time that deliberately paying late, finding ways to pay late, or making unilateral changes to pre-agreed contracts is seen as being as unethical as tax evasion.” |
| Finsbury yesterday posted a 24 per cent rise in revenues in the six months to 27 December, as sales of Disney Frozen cakes helped it boost revenues to £107.6m. Its acquisition of specialist bread-supplier Fletchers Group last year also helped its performance. | Finsbury yesterday posted a 24 per cent rise in revenues in the six months to 27 December, as sales of Disney Frozen cakes helped it boost revenues to £107.6m. Its acquisition of specialist bread-supplier Fletchers Group last year also helped its performance. |