Changes needed to Prompt Payment Code, says FPB

Friday 15 February 2013

Customer service

Changes are needed to the Prompt Payment Code to prevent slow payers from signing up, it has been claimed.

The Forum of Private Business (FPB) says companies with payment times as long as 90 days are planning to sign up - including Unilever, which increased from 60 days in 2010.

Last October, Sainsbury's increased non-food supplier payment times from 30 to 75 days, and in January the supermarket giant announced plans to sign up to the code.

According to the FPB, this type of behaviour undermines the spirit of the Prompt Payment Code.

Phil Orford, chief executive of the organisation, said the rules have to be firmed up to prevent this type of abuse.

"We feel big businesses are cynically using the Prompt Payment Code to boast of their ethical credentials to the wider public, when in fact they are anything but to their suppliers," he stated.

"No one in their right mind can think Unilever's 90-day payment terms are ‘prompt', so why should they be allowed to sign the Prompt Payment Code. It's a ridiculous situation which has to stop."

Mr Orford said companies like Unilever and Sainsbury's are "hoodwinking the public for their own PR purposes" by signing.

The small firms who supply them will see absolutely no change to "cripplingly long payment times", he warned.

Posted by Dan Smith