Molson Coors slammed for extending supplier payment terms

Brewing behemoth Molson Coors has been heavily criticised for extending the length of time it takes to pay its suppliers.

The Forum of Private Business (FPB), which claims to represent thousands of small business around the UK, has entered the brewer into its 'Hall of Shame' for those companies which take months to pay for goods and services supplied by firms which it said can ill afford the kinds of delays being imposed.

Molson Coors recently wrote to its suppliers informing them of the move to go from 60 days payments to 90 days.

But FPB spokesman Phil McCabe said many small businesses couldn't afford to wait so long in order to be paid.

"Maintaining a healthy cash flow is hugely important to small businesses, especially in the current economic climate, and many such companies simply can't afford to wait months and months to be paid for work they have carried out.

"As a result, paying late often works to the detriment of big businesses as they shrink the pool of suppliers and contractors who are able or willing to work for them, hampering competition and choice," he said.

McCabe said the FPB had written to Molson Coors "urging them to reverse the extension to their terms and sign up to the Prompt Payment Code".

Responding to the FPB's criticism, a spokeswoman for Molson Coors said the extension to 90 days brought the group into line with a number of other large companies and was still behind others in the brewing industry which paid after 120 days.

"We are building a sustainable business for the future and cashflow is an important factor," she said.

Acknowledging that for some suppliers and businesses the changes would be a "blow", the spokeswoman added that the 90 day terms were not being applied across the board.

"It's not a one-size-fits-all, and we will be working with suppliers and looking at payments on a case-by-case basis," she added.

Molson Coors is not the first big brewer to be entered into the FPB's 'Hall of Shame'. Last month the organisation did the same to Carlsberg UK for introducing a 95 day payment term from the end of the month in which an invoice was despatched to them.

The FPB said such arrangements could "threaten the viability of countless small businesses involved in its supply chain".