Wednesday 17th December, 2014

Following hot on the heels of the Premier Foods' "Pay-to-Stay" demands, Newsnight last night exposed the controversial payment terms of UK food manufacturer, 2 Sisters. In proposals that one supplier called "beyond unreasonable" on last night's programme, 2 Sisters looked to push payment terms out to as much as four months.

2 Sisters supplies supermarkets such as Tesco, Lidl, Aldi, M&S and Asda with, in particular, own-label frozen chicken. The firm set out a series of proposals including suppliers taking a 3% discount on goods paid for within 90 days. If the supplier decides to reject the proposal, terms go up to 120 days. In certain circumstances, 2 Sisters states that it has the right to extend terms to as much as 134 days.

One supplier stated on last night's programme that they could no longer work with the company on these terms.

However, 2 Sisters has said that on average, suppliers were paid within 49 days last year, and that the terms referred to on Newsnight should be seen as simply a starting point for negotiations.

Advice from the EU Late Payment Directive suggests that a supplier should not have to wait longer than 60 days for payment of goods and services.