Diageo has changed its plans to extend the amount of time it has to pay its suppliers from 60 to 90 days, after a backlash from the Forum for Private Business (FPB).
The UK drinks giant originally defended the decision as an effort to sustain the long-term goals of the business, but has now clarified that it will continue its original scheme; paying suppliers within 60 days.
The FPB claimed the new scheme would hurt small businesses, which require prompt payment to survive. Diageo, the FPB said, were in danger of “breaking the backbone of the British economy,” the Daily Telegraph reports.
The U-turn by Diageo came after the Chartered Institute of Credit Management (CICM), which manages the Prompt Payment Code on behalf of the UK Government, threatened to remove Diageo as a signatory of the Code.
David Cutter, president of supply and procurement for Diageo, said the original plans had caused "confusion" and stated that it had no intention of changing the parameters of payment for current businesses.
"We want to clarify that our standard supplier payment terms have not changed and no supplier would be required to move to longer payment terms in order to secure future business," said Cutter.
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