28th March 2008
Boots kicked over new payment terms
Pharmaceutical retail company Alliance Boots has come under fire for a change to the way that it pays its suppliers.
The Forum for Private Business (FPB) has added the store chain to its "Hall of Shame", after hearing of a change in terms and conditions that could see suppliers waiting up to 105 days for payment.
Under the new regime, effective from 1 April, invoices will be payable up to 75 days after the end of the month in which they are dated.
A 'settlement fee' of 2.5% before VAT is also to be levied - interpreted by at least one small business as a discount for "the privilege" of being paid within the new contractual period.
"The practice of large retailers – in particular – abusing their buying power continues to have a very negative impact on smaller businesses," said the FPB's chief executive, Phil Orford. "Many of our members have registered their disapproval with us."
A spokesperson for retailer Boots said that the changes were part of a process to integrate its business with Alliance UniChem, the company with which it merged in 2006.
"We are committed to working with our suppliers for our mutual long-term benefit," the spokesperson added. "Our procurement strategies are in line with other groups of similar size and scale."
The Forum for Private Business (FPB) has added the store chain to its "Hall of Shame", after hearing of a change in terms and conditions that could see suppliers waiting up to 105 days for payment.
Under the new regime, effective from 1 April, invoices will be payable up to 75 days after the end of the month in which they are dated.
A 'settlement fee' of 2.5% before VAT is also to be levied - interpreted by at least one small business as a discount for "the privilege" of being paid within the new contractual period.
"The practice of large retailers – in particular – abusing their buying power continues to have a very negative impact on smaller businesses," said the FPB's chief executive, Phil Orford. "Many of our members have registered their disapproval with us."
A spokesperson for retailer Boots said that the changes were part of a process to integrate its business with Alliance UniChem, the company with which it merged in 2006.
"We are committed to working with our suppliers for our mutual long-term benefit," the spokesperson added. "Our procurement strategies are in line with other groups of similar size and scale."
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