Finance

Late payments still issue for craft brewers as govt reveals small businesses owed £32k

By Emily Sutherland contact

- Last updated on GMT

The Government has proposed setting up a small-business commissioner
The Government has proposed setting up a small-business commissioner

Related tags: Craft brewers, Small business, Business

Late payments are still a major headache for craft brewers according to Cloudwater Brew Co founder Paul Jones, despite attempts from the Government to tackle the issue.

Jones previously told the Publican’s Morning Advertiser​ that pubs, bar chains and breweries that stretch credit terms​ were putting huge pressure on the new wave of craft brewers, ‘eating up’ profit margins and hampering expansion.

Business secretary Sajid Javid has outlined plans to tackle the problem after finding the average British small business is owed almost £32,000 in overdue invoices.

Speaking in the House of Commons Javid said: “We are establishing a small-business commissioner with a remit to handle complaints by small businesses about payment-related issues with larger businesses. The commissioner will also have the resources to give general advice and information to assist small businesses with supply relationships and direct them to mediation services.”

However, the founder of the Manchester craft brewer said he thought businesses would fail to comply unless the small-business commissioner wielded some statutory power.

“About a year in to our business, we’re starting to be approached by larger customers and we’re finding that payment terms are creeping from 30 days to 60 days and sometimes even 90,” said Jones. “As a small business, it can be very difficult to provide that.

“It’s still a problem and we still have to spend a ridiculous amount of man hours chasing payments. A lot of people say that stretching credit terms is how they’re funding the growth of their businesses, but for us, what starts off as an exciting conversation with customers quickly becomes a headache.”

Association of Licensed Multiple Retailers chief executive Kate Nicholls said she thought the move from the Government could potentially be ‘very helpful’.

“The Bill and its late-payment provisions have highlighted the discrepancy between the payment terms many larger companies impose on their small business customers as opposed to those that they use when they are paying suppliers. What we need to ensure is that there is fairness across the board and that larger companies don’t demand unreasonable payment terms from small customers or small suppliers,” she said. 

Related topics: Legislation, Beer

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