Thursday 22nd May, 2014

Mars UK, the producer of some of the UK's best-known confectionary brands has doubled its payment terms from 60 to 120 days according to the Forum of Private Business (FPB). Although suppliers are being offered the option of being paid a reduced amount within 10 days as part of a supply chain finance scheme, the Forum said that Mars UK could be placed in its late payment 'hall of shame'.

FPB chief executive Phil Orford said: "Whilst the Forum of Private Business is a great supporter of supply chain finance schemes in the right circumstances, they should not be used as a justification for a company extending payment times to its suppliers."

"We are concerned to learn that Mars UK is doing just this, extending payment times up to 120 days for some of their suppliers. Lengthy payment terms can be extremely damaging for small businesses. Whilst the supply chain finance scheme allows them to be paid quicker, it is at a cost. If suppliers want the full invoice they are entitled to they will have to wait 120 days."

He added that Monsoon and Debenhams have carried out similar practices over the past few years. "GlaxoSmithKline and Premier Foods have charged suppliers a one-off fee simply to continue to be considered as preferred suppliers for their businesses," said Orford.

A Mars UK spokesperson said: "We can confirm that we are making changes to our supplier payment terms. We really value our relationships with suppliers and are working with our partners on the changes. We are in the process of communicating the details of the new terms that we believe will offer suppliers greater flexibility."