Several major FMCG companies have been labelled as “slow payers” as they take months to pay back businesses, new research has claimed.
Food giants, including convenience foods producer Greencore and US-based food major Kraft Heinz, are taking over 100 days to pay their invoices to suppliers in the UK, according to local think tank Good Business Pays.
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The latest report shows a 20% increase in companies reporting average payment times of over 80 days, with the largest surge in businesses reporting payments being made between 80-90 days.
Three Greencore divisions – Greencore Food to Go Ltd., Greencore Grocery Ltd. and Greencore Prepared Meals Ltd. – are averaging between 81 and 92 days to pay invoices to their manufacturers. For the former division, 75% of payments are made in 61 days or more.
For its grocery and prepared meals sub-divisions, respectively 85% and 90% of invoices have been paid in 61 days or more between 1 April 2023 and 29 September 2023.
Meanwhile, for the period between 2 July 2023 and 30 December 2023, Kraft Heinz’ local UK unit H.J. Heinz averaged 88 days to pay invoices. 79% of invoices were paid in 61 days or more.
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By GlobalDataThe business’ standard payment period for qualifying contracts is 97 days.
The company wrote in its published payment practice report: “Heinz builds and develops relationships with its suppliers and in the first instance would always look to settle any dispute through amicable discussions or, where applicable, in accordance with any dispute resolution provisions agreed contractually.”
Just Drinks has contacted both Greencore and Kraft Heinz for comment.
Other food companies under scrutiny in the research include Kellogg and Mondelez.
Terry Corby, CEO of Good Business Pays, said: “It’s encouraging that 19 companies whose names were published in the autumn watchlist have since dramatically improved their payment performance and only six months later now no longer appear on this list.
“2023 reported the highest annual registered company insolvencies since 1931, and larger companies must support SMEs, who are the backbone of our economy, and this starts with suitable payment performance.”
The UK think tank said that, since the last Good Business Pays Watchlist was published in August 2023, 19 companies have reported “big improvements” in payment performance and no longer appear on the watchlist.
