Premier, which owns some of Britain’s most popular food brands, including Mr Kipling, Oxo and Bisto, has written to its suppliers requesting an “investment payment”.
Firms that do not pay up risk being taken off its approved 1,000-strong supplier list.
The Federation of Small Businesses (FSB) said Premier “should be ashamed of themselves” and claimed that one small company had been asked to hand over £1,700 to secure the chance of future business.
“Driving a hard bargain with your suppliers is one thing, but demanding a cash gift under the threat of delisting is downright unfair,” John Allan, national chairman of the FSB, said.
"If the questionable practice being attempted by the likes of Premier Foods becomes the accepted norm, it may well sink those small firms without the cash reserve to prop up their larger customers."
The FSB, which boasts around 200,000 members across the UK, said that while Premier was not the only company to ask its suppliers for such payments, it “is the first to make such an explicit link between payment and inclusion on supplier lists”.
BBC’s Newsnight claimed that Premier has received millions of pounds from the practice.
Premier Foods told the BBC: "We launched our 'invest for growth' programme in July last year as part of a broader initiative to reduce complexity in support of plans to help turnaround the business.
"This included a commitment to halve the number of our suppliers and develop more strategic partnerships focused on mutual growth.
"The programme requires our suppliers to make an annual investment to help fund our growth plans.
"In return, our suppliers benefit from opportunities to secure a larger slice of our current business.
"They also stand to gain as our business grows in the future."
It added: "In the current challenging environment, the support of all of our suppliers is crucial.
"We have had a positive response from many who are actively engaging in building a new partnership with us, including many small companies."
The company announced a profits warning in October as a supermarket price war takes its toll on food producers. It added that third-quarter sales fell 4.7pc.
It also announced a rights issue and refinancing earlier this year.
Original Article
Source: telegraph.co.uk/
Author: Andrew Trotman
No comments:
Post a Comment