Outlook Consider, if you will, the response by 2 Sisters Food Group to the mounting scandal over its treatment of its suppliers. In the wake of revelations that the maker of Fox’s biscuits and Goodfella’s pizza has been asking some of them for four months grace before paying them, it suggested that this was merely the starting point in a negotiation. So that’s alright then.
But there’s more. As if it somehow makes 2 Sisters the Usain Bolt of the supply chain, we are told that the average bill is paid within 49 days. That’s fully seven weeks, or nearly two months in real money. Which appears to change hands at the speed of a distressed snail in Great Britain plc.
Lord Haskins, whose family founded Northern Foods, taken over by 2 Sisters in 2011, was positively fuming when this newspaper contacted him about what has been going on at his old shop. But given what has emerged over the past few months, does it come as any great surprise? Prior to the revelations about 2 Sisters unsisterly behaviour we had Premier Foods demanding what it described as “investment payments” from its suppliers in what looked very much like a “pay to stay” scheme.
After the scandal broke, Premier said it would discontinue the practice and revert to the time-honoured practice of screwing its suppliers by demanding discounts and rebates. Which, to the small supplier, amounts to much the same thing in practice.
Supermarkets are supposed to behave better, having signed up to the Groceries Code. Except that suppliers have told us that abuses are still commonplace. As the scandal over Tesco’s accounting – now being investigated by the Serious Fraud Office – demonstrates. It doesn’t take a Hamlet to see that there is something very rotten in Denmark, and it’s got nothing to do with over-ripe food. It is at times like this that people start calling for the newly minted Competition & Markets Authority to get busy. Including Business Secretary Vince Cable, who tweaked its nose when news of Premier’s investment payments broke.
But here’s the problem: this sort of behaviour might be unethical, even immoral. It’s certainly unhealthy, and arguably damaging to the economy. But is it genuinely anti-competitive and does it ultimately damage the end consumer? That’s open to question. And if the CMA can’t answer an unequivocal yes, with enough proof to back it up, it can’t get involved.
Mr Cable’s Department for Business, Innovation & Skills, which has legislative authority, can, however. Perhaps, instead of passing the buck, it should do.Reuse content