Tuesday 15th January, 2013

The Forum of Private Business has put GlaxoSmithKline (GSK) into its ‘Hall of Shame’ along with other large corporates for increasing supplier payment times from 60 days - which could mean some suppliers having to wait up to 90 days to be paid.

GSK, the world's fourth largest pharmaceutical producer is part way through a programme to inform its suppliers of the changes.

FPB’s spokesman Robert Downes said: "When suppliers receive a letter like the one GSK's suppliers are starting to receive, few have any choice but to agree to the new payment terms. There is little room for bargaining through fear they will lose the business, and no small firm wants that in the current economic climate.

"For the sake of small businesses and the economy, the Government must prioritise tackling the culture of poor payment, addressing the bully boy behaviour of these bigger companies.

He added "GSK can't even argue they've not got past form. Only two years ago they increased supplier payment terms to 60 days, and now this. They are relentless.

Supply Management reported GSK response; “For most suppliers, the changes we have made to our payment terms will have little to no impact if they submit their invoices towards the end of the month,” a statement said.

The company added that vendors will be treated case-by-case and that shorter payment schedules are available. “We greatly value the relationships we have with our many suppliers and understand the pressures on cashflow and financing being faced by smaller companies at this time. This is why, for smaller companies, we have a number of schemes in place to help them, including alternative payment schedules and offering supply chain finance,” it said.