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|Tesco breaches GCA supplier code - what does this mean for SMEs?|
|Wednesday, 27 January 2016|
Tracy Ewen, managing director of IGF Invoice Finance, comments on the news that Tesco is to be censured by the Groceries Code Adjudicator over its treatment of suppliers: “The news that the Groceries Code Adjudicator will reprimand Tesco over its treatment of suppliers is good news for small businesses in the UK. For many in the supply chain, Tesco’s payment terms have been unsustainable due to delays in payments and unexpected changes in contract terms. This is a reality that SMEs have had very little power to change in the past; the GCA stepping in to censure Tesco over its behaviour is a step forward in helping small businesses tackle the constant stream of unfair payment terms coming from large corporations.
Tesco announced last year that it plans to simplify its payment terms, however these will not be brought into effect until June, meaning that s suppliers will continue to be subjected to these unsustainable conditions.
Suppliers have been left waiting for the news of the Small Business Commissioner, which was promised has part of the Enterprise Bill, so substantial support from Government is still uncertain. In the meantime, there are options available to smaller suppliers to cover the gap between completed work and money in the bank. Businesses must ensure to make use of any free financial advice available, before pressure from larger customers impacts their growth or operations. ”
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