The Forum of Private Business is investigating claims that high street chain Halfords is calling on existing suppliers to invest significant sums of money in the growth of their business, a rebate of already agreed contractual payments in all but name.
The Forum, a small business membership body, has seen statements asking suppliers to stump up the money to ensure the future success of the company. Other companies have been making financial demands of suppliers to fund new programmes, but the requests of Halfords are significant for both the amount being asked and the suggestion such payments might not be a one off.
Phil Orford MBE, Chief Executive of the Forum of Private Business, said: “The practice of using suppliers to fund growth is an increasing issue for small businesses. Both GlaxoSmithKline and Premier Foods have charged suppliers a one off fee simply to continue to be considered as preferred suppliers for their businesses. With Halfords seemingly joining suit, on what could be an even larger scale, we are extremely concerned about the ability of larger companies to exploit their supply chains to this extent.
"We are writing to the Competition and Markets Authority and urge them to launch an investigation into this activity as a matter of urgency. Poor payment practices are tough enough to deal with in a recession, but as the UK enters a period of growth they become increasingly anachronistic.”
The FPB has now urged the Competition and Markets Authority to look further into the claims.