A complaint about Sainsbury's proposed changes had been raised by the Fresh Produce Consortium and the National Farmers Union. They were concerned about the retailer's introduction of new payment rules for suppliers, increasing the time they will have to wait for payment from 21 days to up to 49 days. The OFT guidelines say food retailers must give reasonable notice to their suppliers of such changes.
Sainsbury's has told the affected suppliers that the payment changes will not take effect on March 7, as previously planned, and is negotiating with them to establish a new switchover date if no agreement can be reached after 90 days. The retailer says it is happy to mediate to resolve the dispute.
The OFT said it 'welcomes that Sainsbury's is writing to suppliers in dispute over new payment terms about flexibility in their implementation. Where suppliers and supermarkets cannot resolve disputes by negotiation, the OFT encourages use of the mediation procedures in the Supermarket Code.'
A Sainsbury's spokeswoman pointed out that the new payment timings were already standard terms for the majority of its 8,000 suppliers. She said: 'We advised some of our suppliers that we were moving to payment terms more usual for our industry and have done this in a manner that is consistent with the Suppliers Code. We have a long-standing relationship with many of our suppliers and are currently in negotiations with a small number who have asked to discuss this in more detail. We are determined to work closely with our suppliers to offer our customers great products at fair prices.'