Grocery adjudicator disputes late payment a problem

By Matt Atherton

- Last updated on GMT

Late payment in food and drink was disputed by the Groceries Code Adjudicator
Late payment in food and drink was disputed by the Groceries Code Adjudicator

Related tags Late payments Supermarket Receipt

The Groceries Code Adjudicator (GCA) Christine Tacon has insisted there is “no evidence” of late payments by supermarkets to their suppliers, despite the Food and Drink Federation (FDF) arguing the complete opposite.

Tacon told the Food Manufacture Group retailers were paying on average 98% of all invoices on time, and that suppliers had not reported any issues with payment speed to her office.

“In the four years I have been regulating the 10 largest supermarkets, there has been significant progress in this area and I have no evidence that there is now a problem with late payments,”​ said Tacon.

“I do not believe that speed of payment is an issue nor have suppliers ever reported this to me; indeed when I have asked them about payment performance they have said the retailers’ practice is very good.”

Greater reporting transparency

But this view was disputed by the FDF, which represented food and drink manufacturers. It called for greater reporting transparency to limit the problem.

“Late payments are a concern for SMEs​ [small and medium-sized enterprises] that make up 96% of our sector,”​ said an FDF spokesman.

“That is why FDF strongly supports government plans to encourage prompt payment by introducing greater transparency through a mandatory reporting requirement for all large or listed companies, which enters into force in April.

“We believe this can make a real difference for small businesses that face late payments. It will help to raise awareness of payment terms while discouraging unfair practices.”

Losing more than £250bn in cash flow

A new report from Siemens Financial Services (SFS) has claimed that UK SMEs generally were losing more than £250bn in cash flow, and spent an average of 130 hours each chasing outstanding invoices.

The report claimed unpaid invoices accounted for 14% of SMEs’ annual turnover, and businesses with a turnover of under £1M waited an average of 72 days for payment.

SMEs “continued to be plagued by lengthy invoice terms and late payments”,​ said SFS head of invoice finance Ian Cole.

Tacon said that any suppliers facing problems with retailers over late payments should tell her in confidence by completing the GCA survey, which is open until April 17. Suppliers can respond here​.

Meanwhile, Tacon has failed to defend supermarket suppliers against bad practice,​ claims Duncan Swift of accountancy firm Moore Stephens.

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