Carlsberg slammed over payment terms

Small businesses could now wait up to four months to be paid by Danish brewing giant Carlsberg.

The brewer has come under fire from the Forum of Private Business (FPB) for extending its payment terms to 95 days from the end of the month.

The FPB, which has added it to its hall of shame for big businesses with "poor payment practices", said the move could mean small businesses waiting up to 120 days to be paid if a bill was issued early in a month — and that could threaten the viability of those businesses.

The FPB has sent a letter to Carlsberg UK chief executive Isaac Sheps urging him to sign up to the Government's prompt payment code.

"Carlsberg's incredible terms mean that many of its suppliers could be waiting more than four months for payment," said FPB policy representative Matt Goodman.

"A small firm delivering a major order to Carlsberg could easily go out of business with cash flow problems while waiting for the money owed to it.

"This is clearly highly unfair to businesses lower down the supply chain, which are effectively providing interest-free credit to this multinational company.

"We would urge Carlsberg to think again about the amount of time it takes to settle its bills and remember that it may also be shooting itself in the foot. By operating such lengthy terms, Carlsberg is limiting the amount of firms willing to join its supply chain."

In response, Carlsberg UK customer marketing director David Scott said: "Carlsberg UK has recently implemented a policy to extend payment terms to 95 days across all of its suppliers.

"All suppliers' situations are reviewed in light of this extension, and if there is a business case made as to why these payment terms are not acceptable, we will then work with our suppliers to reach terms that are agreeable to both parties."