Sainsbury's criticised over supplier payment terms

The grocer has written to suppliers to inform them it has lengthened the payment time from 30 days to 75 in some cases.

In the letter Sainsbury’s said it had “recently reviewed our standard payment terms and note that they differ from industry standards and, as a result, they will be changing”, The Daily Telegraph reported.

The grocer has moved its payment criteria to 75 days after it “accepts ownership” of it the goods. The letter stated: “For example, an invoice dated December 14 2012 will be paid on February 27 2013, with cleared funds being in your bank account no later than three business days of this date.”

The Forum of Private Business (FPB) attacked Sainsbury’s over the decision, which it labelled “unacceptable”.

FPB senior policy advisor Phil McCabe said: “There has been no real consultation - a letter to suppliers telling them it is happening does not count, and the excuse that this is in line with industry standards is just laughable.

“That is why we are naming and shaming Sainsbury’s in our late payment hall of shame.”

A Sainsbury’s spokesman said: “We have written to our [non-food] suppliers about our intention to bring their payment terms more in line with the rest of the industry. This will be followed up individually with any suppliers experiencing difficulties in meeting this change.We are fully committed to ensure all payments to our suppliers are made on time.”