BusinessCorporate FinanceGiant chains accused of bullying small enterprise

Giant chains accused of bullying small enterprise

Finance directors accuse the UK’s largest companies of conducting business unfairly and bullying small businesses

Great Britain’s finance directors have accused the UK’s largest companies of
strangling small enterprise and conducting business unfairly by bullying small
businesses.

The FDs were responding to research conducted by Accountancy Age and credit
specialists Graydon, which found that retail giants such as Tesco, Somerfield
and Morrisons were all failing to pay a number of their smaller suppliers on
time.

The Accountancy Age/Reed Finance Big Question polled FDs on their views on
the research compiled by Graydon, and found that almost all of the respondents
were critical of the way big businesses treated their suppliers.

A massive 95% of the respondents agreed that big business was overly powerful
in the UK and strangling smaller enterprise, while only 5% of the FDs said this
was not the case.

Chris Burhop, the FD of BFF Technical Fabrics, said he found it hard to
accept that highly cash generative business were unable to pay invoices on time.

‘There is a general tightening of cash flow throughout the business economy
and Tesco et al are merely highly visible examples of this. Ironic that. As a
hugely cash generative sector, they are the businesses which least need to be
tightening their creditor payments,’ he said

Another FD called on government to intervene and protect small businesses
through legislation. ‘The government should extend its anti-bullying policies to
include businesses,’ the FD said.

A third FD said that squeezing suppliers may seem to be ‘good short term
business practice’, but would not be ‘sustainable in the long term’.

An FD that did not lay the blame on large companies for squeezing small
business said: ‘The small suppliers go into a contract with the big suppliers on
such long terms, that it is not surprising if terms of payments get blurred and
are unable to be tracked month on month,’ said the FD.

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