Food giant 2 Sisters has been accused of proposing contract terms that are ‘beyond unreasonable’. Suppliers for the producer of Goodfella’s pizzas and Fox’s biscuits have been presented with terms that could give 2 Sisters more than four months to pay their bills. The terms also entitled the manufacturer to a three per cent discount if it paid within 90 days. Last year they said on average they paid their suppliers in 49 days. 2 Sisters supplies most supermarkets such as Asda, Tesco and Marks & Spencer with the bulk of its business from frozen chicken.
Under the EU Late Payment Directive, firms should not take more than 60 days to settle bills without explicit agreement from a supplier. Documents obtained by BBC Newsnight show that if a supplier does not agree to the three per cent reduction then payment can be made within 120 days. In some circumstances this can be extended by a further 14 days. 2 Sisters said that this was a starting point for negotiations and can change. This news follows the disclosure of Premier Foods ‘pay to stay’ demands.