FSB Slams Premier Foods' Unfair 'Investment Payment'

The Federation of Small Businesses (FSB) has slammed Premier Foods' unfair payment practices.

In a recent letter to suppliers, Premier Foods, the UK's largest food producer, requested a compulsory 'investment payment' to be made by any company wishing to stay on its approved supplier list.

The demanded payment would not necessarily guarantee any future contracts and it is unclear how the payments have been calculated. One small business in the South West was asked to pay £1,700 to secure the chance for future business with Premier Foods.

John Allan, National Chairman of the Federation of Small Businesses, said: "Premier Foods should be ashamed of themselves. Driving a hard bargain with your suppliers is one thing, but demanding a cash gift under the threat of delisting, is downright unfair.

"The deterioration of payment practices is an anchor dragging on the potential of small and medium businesses to grow and take on new staff. Too many firms are waiting months for the money they are owed, and this has knock-on on their own supply chains.

"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."


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