Carlsberg UK Ltd
We are entering Carlsberg into the Hall of Shame after discovering the Danish brewer takes more than 95 days from the end of the month in which an invoice is sent out to pay many of its suppliers.
This means that businesses supplying the multi-national company can expect to wait well over 120 days before Carlsberg settles a bill issued early on in a month. These are the longest payment terms we have ever been made aware of and we believe that they could threaten the viability of countless small businesses involved in the supply chain.
We have sent a letter to Carlsberg UK Ltd chief executive Isaac Sheps highlighting the issue and urging Carlsberg, which this month announced increased pre-tax profits of 344 million for the second quarter, to sign up to the Government's Prompt Payment Code.
Northgate Information Solutions
The leading IT company Northgate Information Solutions has been entered into our Hall of Shame after doubling the amount of time it takes to pay some suppliers.
From July 2009, they will take 60 days to settle invoices from recession-hit small firms.
Northgate informed its suppliers of the move in a letter which gave them 10 working days to object. Otherwise, it said, suppliers would be "deemed to have duly accepted Northgate's revised payment term".
Construction company Rok plc has been entered into our Hall of Shame after doubling its standard payment terms for new contracts with sub-contractors and consultants.
The 60-day standard payment will apply to all future agreements "which if not refuted in writing within seven days of its receipt will be deemed effected," according to a letter, seen by the Forum, which was sent by a subsidiary of Rok plc to sub-contractors and consultants on 22 June 2009.
This comes despite claims that one of its 'core values' is to "improve [its] long term profitability and that of [its] supply chain colleagues." Click here
to read Rok's response.
Tetrosyl, the car care products and accessories company, has been entered into the Forum's Hall of Shame after writing to suppliers demanding a 1% 'settlement discount' money off all invoices it pays within its contractually agreed time.
Tetrosyl's excuse is that it is simply passing on costs associated with the increasing demands of its customers, necessitating 'balancing the impact in an equitable way'. The Forum has written to Tetrosyl inviting the company to explain its actions, and to sign up to the Government's Prompt Payment Code.
United Biscuits, the company behind some of the UK's best known biscuit brands, such as McVitie's, Jaffa Cakes and Carr's, is being named and shamed after changing its payment terms payment terms from 45 to 75 days. Suppliers were informed by letter but given just one week's notice.
The Forum has written to United Biscuits outlining the damage being done to its smaller suppliers, and urging it to sign up to the Government's Prompt Payment Code.
Argos re-entered the Hall of Shame in May 2009 after doubling its payment terms from 30 to 60 days. In addition, it deducts a 4% 'settlement discount' from invoices it pays within that time.
The Forum has also learned that Argos is imposing steep 'supplier compensation charges' fines on suppliers which provide incorrect product details that require changes to its catalogues.
Argos initially appeared in the Hall of Shame in 2005 when it insisted suppliers remained silent about its enforced changes to payment terms, telling them in a letter: "It goes without saying that all discussions that take place between us are confidential. Under no circumstances should any information that is provided to you by us be disclosed by any third party."
InBev purchased Anheuser Busch In July 2008, making the new company the largest brewer in the world. In addition to extending its payment terms from 1st January 2009, it has staggered the amount it pays to suppliers of its capital expenditure projects (45% upon delivery of the equipment on site, 20% upon start-up of the installation, 20% at the provisional acceptance stage and 5% upon delivery of the full spare parts list.
For other suppliers, the company is insisting it compares prices offered to both companies before the merger, stating it will only accept the lower price.
In May 2007, InBev was first entered into the Forum's Hall of Shame after extending its payment terms to 60 days, giving suppliers just one month's notice and telling them it intended to become the 'biggest to best' in its sector.
The company behind some of the world's biggest-selling alcoholic drinks brands such as Guinness and Johnnie Walker, has extended the period within which it pays its smaller suppliers including members of the Forum - to 60 days.
The new payment terms, which affect all of Diageo's non-contracted suppliers, came into effect on 19 January 2009. However, the company sent out a letter of explanation just days before, on 9th January 2009.
The Forum has written to Diageo to express its dismay at the move, part of the company's 100 million cost-cutting exercise, outlining the damage being done to its suppliers. In addition, the Forum invited Diageo to sign up to the Government's 'prompt payment code'.