2 Sisters in spotlight as contract terms are criticised
2 Sisters Food Group has been accused of setting “beyond unreasonable” terms of contract by one of its suppliers on a BBC Newsnight programme.
The chicken processor is the latest firm to come under fire from BBC Newsnight’s investigation into “supply chain bullying”, which last week outed Premier Foods “pay to stay” plan.
BBC Newsnight obtained the 2 Sisters contract from Simon Fenton, a small supplier, which stated the firm was “seeking more than four months” to pay bills. 2 Sisters reported it pays suppliers within 49 days on average.
Exclusive: document obtained by #newsnight shows how food giant 2 Sisters sent suppliers terms + conditions giving it 120 days to pay bills— Ian Katz (@iankatz1000) December 16, 2014
However, in the documents shown to the programme, the firm was also seeking a 3% discount for paying suppliers within 90 days; if a supplier rejected this, then the company should be allowed 120 days to pay.
According to EU restrictions firms should pay suppliers within 90 days.
Fenton told Newsnight: “The contract we got from 2 Sisters is unlike anything we’ve had from any other of our customers. We obviously negotiate terms and conditions with everyone we deal with, but the terms and conditions and clauses laid out in the 2 Sisters one were beyond unreasonable.”
In a statement 2 Sisters said: “Ultimately, the supplier can choose not to trade on any terms it feels are unsuitable, and we abide by standard business-to-business payment protocols, where payment can exceed 60 calendar days as long as this is expressly agreed in the contract.”
Business minister Matthew Hancock, who sat on the Newsnight panel, said it is “hard to see how a contract like this can be appropriate or right as a starting point in a negotiation”.
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