Tuesday, October 21, 2008

UK government asks supermarkets to pay faster

Well, it's a nice thought, of course, but I hope nobody's expecting much.

The UK's minister of the environment asked UK supermarket chains to pay small suppliers more quickly:

Hilary Benn, the environment secretary, met leaders of the main food chains to emphasise that small businesses were far more dependent on the timing of payments than larger companies.

"A single late payment can be the difference between survival and collapse. That will be truer now more than ever in the coming weeks and months," Benn said after the meeting in London. Small businesses and farmers were the lifeblood of the food industry and should be helped through "turbulent times".

For an idea of the most likely outcome, scroll down two posts to Tesco demanding more money.

I know I'm terribly cynical sometimes, but I really don't think the big retailers are going to help out suppliers' cash flow at a time when they can quite justifiably say, "Hey, I've got my own problems."

A case can be made that helping small suppliers survive is in the retailers' long-term interests (the existence of alternatives gives them more leverage against their big suppliers), but I suspect that most folks are going to be thinking very short-term (even more so than usual) until the storm passes.

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