Carlsberg, the world’s fourth largest beer-maker, recently introduced standard payment terms of 95 days from the end of the month in which an invoice is sent out. This means that businesses supplying the multi-national company can expect to wait well over 120 days before Carlsberg settles a bill that was issued early in the month. The FPB believes the practice is wholly unacceptable and has added Carlsberg into its “Hall of Shame” – a list of big businesses known to operate poor payment practices.  Late payment practices cause serious cash flow problems for many smaller firms and mean that they are effectively providing free credit to the larger businesses they supply. However, few small firms challenge the payment terms as they are often afraid of losing vital work. The FPB this week sent a letter to Carlsberg UK’s chief executive Isaac Sheps highlighting the issue. The letter urges Carlsberg, which this month announced increased pre-tax profits of £344m for the second quarter, to sign up to the government’s Prompt Payment Code.

“Carlsberg’s incredible terms mean that many of its suppliers could be waiting more than four months for payment,” comments the FPB’s policy representative Matt Goodman. “That is a long time by anyone’s standards; most of the businesses in our Hall of Shame have been exposed for taking between 40 and 60 days to pay their suppliers. A small firm delivering a major order to Carlsberg could easily go out of business with cash flow problems while waiting for the money owed to it.” Do you think Carlsberg’s payment terms are acceptable or outrageous? Click the Add a Comment button below and share your views.

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