In an email seen by FoodManufacture.co.uk that was sent to an undisclosed number of recipients last Friday, the debt-laden firm says: “[We] know what we need to do to make being a member of the [Preferred Supplier] programme of greater value, and would like to ensure that your organisation is best placed to gain from this.”
As a member of the PSP, “all HR managers at Premier will be briefed as to which agencies are members so that introductions are made easier”, it adds.
In addition, PSP members will also be able to attend a “follow-up supplier event, earlier in the year”, receive the 'Premier Life' quarterly magazine and get regular updates on changes within the business.
It concludes: “I would be most grateful if you could confirm back to me whether your organisation is interested in signing-up to the PSP for a fee of £10,000 for 2011, and look forward to hearing from you. Please email by return, by close of play Wednesday, 3rd November 2011.”
‘It's a disgrace’
One recipient of the email said it was the most blatant example of a company asking for money from suppliers to resolve its own financial problems that he had seen in more than 15 years in the industry.
He added: “There is definitely a subtext of ‘pay up or you will not supply’. I object to this. Can you imagine asking your suppliers for a fee before they can supply you? Is this the UK or is it some banana republic? It's a disgrace.”
He added: “Just because they are up to their eyeballs in debt does not mean that they should pick on us. We are a small business and we are having a tough time. But they should also recognise that the market will turn and candidates will be in short supply again. This could come back and hit them in the face.”
The source, who has not yet responded to the email, said he did not expect suppliers would simply roll over and pay the fee, adding that his firm would probably not pay up. And this was not purely a commercial decision as to whether it was worth it financially, he stressed.
”It’s the principle of the thing. It’s just a bullying exercise.”
Another agency source told FoodManufacture.co.uk: "I have worked in recruitment for many years and have been involved with many PSLs [preferred supplier lists]. This is the crassest attempt to exploit a recruitment supplier I have ever seen."
However, a spokesman for Premier Foods, which is currently fielding offers for its meat-free brands Quorn and Cauldron in a bid to reduce its debt pile, said it was very misleading to suggest that money had been demanded from suppliers, and stressed that no suppliers had been delisted for choosing not to participate in the scheme, which has already been running successfully for a year.
The initiative had received very positive feedback, he added. “Premier Foods is seeking to retain a strong cadre of suppliers that are committed to developing their business with the company. This has resulted in a list of preferred suppliers in recruitment, as in other areas.
“Last year we instigated a Preferred Supplier Programme for our suppliers in permanent recruitment which included the initiatives described in the e-mail. We received really positive feedback from those who participated in the programme last year. They told us that they are seeing clear value from being part of the scheme.
"As a result we are again inviting suppliers to take part in the programme and already a number have confirmed their participation for 2011.
“This programme is not compulsory and no suppliers have been delisted from the preferred supplier list for choosing not to participate. We are disappointed to learn that these suppliers appear to have misunderstood what’s being offered by this programme. We would welcome the opportunity to discuss this further with the suppliers concerned.”