United Kingdom: Carlsberg UK extends payment period

Carlsberg UK, the British division of the Danish brewing giant, has changed the terms for paying suppliers to 95 days from the end of the month in which an invoice is sent out, the Telegraph reported on August, 13.

The Forum of Private Business (FPB) said that means companies could be waiting for more than 120 days before Carlsberg settles a bill issued early in the month.

Matt Goodman, policy representative for the FPB, said: "A small firm delivering a major order to Carlsberg could easily go out of business with cash-flow problems while waiting for the money owed to it.

"This is clearly highly unfair to businesses lower down the supply chain, which are effectively providing interest-free credit to this multi-national company."

He said few small companies are willing to challenge payment terms with major customers as they are afraid of losing vital work.

One supplier, who asked to remain anonymous, said the new terms could prove very problematic. He runs a business with a turnover of up to £100,000 a year – 20pc of which comes straight from Carlsberg. Monthly outgoings come to around £2,500, he said.

"I only employ one person but I would struggle paying them. Then it's VAT, insurance, the normal running costs of a business, such as a phone."

Carlsberg said it would consider its suppliers' circumstances before implementing the change.

David Scott, customer marketing director for Carlsberg UK, said: "If there is a business case made as to why these payment terms are not acceptable, we will work with our suppliers to reach terms agreeable to both parties."

14 August, 2009