Christine Tacon, the Groceries Code Adjudicator, has sent a letter to retailer’s Code Compliance Officers (CCOs) about payment terms during the current coronavirus crisis.
In recent days, Morrisons, Tesco, Sainsbury’s, and Aldi have all pledged to reduce the time it takes to pay smaller suppliers to help with cashflows amid the current spike in demand for food & drink products.
However, the GCA’s letter (below) suggests some retailers could do more to support suppliers during this difficult time.
Dear CCO,
Payment terms
As you know, the Code covers delay in payments and your business has over the time I have been GCA worked hard to improve performance, but one of the areas in which I am frequently asked to intervene is in relation to payment terms, which are not covered by the Code.
I have always resisted saying anything about them as a result. In the current groceries supply situation, however, cash flow is critical for many of your suppliers.
Some retailers already pay small suppliers within 14 days and have recently accelerated those payments still further, which is appreciated. Anything else you are able to offer your suppliers to help them through this extremely difficult time would be very welcome.
Yours sincerely,
Christine Tacon
NAM Implication:
- A no-brainer in terms of supply continuity and availability…
