Supermarkets under cosh

SAINSBURY’S IS in the firing line again after the Forum of Private Business went on the warpath over the way the retailer has treated its suppliers.

The FPB has refused to back down on criticism of Sainsbury’s efforts to enforce extended payment terms for 1900 suppliers, which it likened to “ripping up” existing contracts.

And now the lobby organisation says it has seen off a bullying challenge from the supermarket’s chief executive Justin King, who tried to prevent the claims.

“We’ve won because [Justin] King tried to threaten us,” said an FPB spokesman. “We want to show people that Sainsbury’s does abuse its market power and does try to bully people.”

The row first emerged after the retailer wrote to suppliers in January informing them their payment terms had been lengthened up to two months.

Sainsbury’s failed to offer an avenue for negotiation, a key part of the voluntary code of conduct, until the Department of Trade and Industry became involved.

The FPB spokesman claimed all the major supermarkets employed similar tactics, and vowed to remain on the look out.

Negotiations have since been concluded, Sainsbury’s said, and all suppliers are now on the new “standard” terms. A spokeswoman said she was puzzled as to why the FPB have continued to raise the issue.

Meanwhile, the NFU Scotland has called again for a regulator to ensure supermarkets could not abuse their dominant position.

Suppliers contacted by the union in the wake of an Office of Fair Trading probe, which failed to reach a conclusion in March, confirmed abuses ranging from loyalty payments to imposed contract changes.

NFUS president, John Kinnaird, said: “I completely accept that when the supermarket and supplier relationship works, it is hugely beneficial to both parties. 

“But surely in a society where supermarkets have an increasing grip on food and drink sales, there must be a check in the system when that relationship breaks down?”