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From the beginning of September, retail giant Matalan is to impose a 2%
deduction on all payments to suppliers.
The company intends to use the money saved to pay for TV advertising, marketing
and PR activities.
The FPB has entered Matalan into its ‘hall of shame', which identifies companies
which seek to cut costs by squeezing their suppliers.
Also at the expense of its suppliers, Matalan plans to expand retail parks,
develop international franchises, expand its online business and refurbish
stores.
Buying Director John Lyttle told the FPB's members the retailer would impose the
charge to fund drive efficiencies and prepare for future growth.
Mr Lyttle promised suppliers that "the benefit from the expansion will generate
increased business, and I hope that you will participate in this growth."
The FPB's Chief Executive, Phil Orford, said that the FPB's members supplying
Matalan would disagree.
He explained: "This is not the first time that Matalan has passed on costs to
its suppliers and it represents a payment problem that is endemic across a
number of industry sectors.
"The fact that this latest charge is being justified to fund initiatives like
marketing and international expansion adds insult to injury for many smaller
firms, which are struggling to control essential costs as the economic downturn
continues.
"I feel sure that many suppliers are already asking why investment can't be
funded by the substantial increase in profits recently announced by Matalan.
"The FPB took Matalan to task two years ago for imposing a similar charge which,
it insisted, was a one-off.
"Clearly, Matalan has an ongoing policy of blatant and sustained abuse, using
its size and power to make more money at the expense of its supplier base."
It is understood that Matalan does not plan to introduce the latest 2% charge
retrospectively, but some of the FPB's members are concerned that it will apply
for goods they have already delivered.
Source:
RedAlert
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