The Forum of Private Businesses said that the food giant had introduced a supply chain finance scheme as a cover for extending its supplier payment terms from 60 to 120 days.
FPB chief Phil Orford said the group supports supply chain finance in the right circumstances but that it shouldn’t be used as justification for extending payment terms.
He said: Lengthy payment terms can be extremely damaging for small businesses. Whilst the supply chain finance scheme allows them to be paid quicker, it is at a cost.
The practice has been growing in recent years. Mars looks set to join Monsoon and GSK in the FPB’s late payments hall of shame.
Orford added: At a time when our economy is beginning to grow again its is fundamentally unfair that small businesses are being used as a line of credit for larger organisations.
A Mars UK spokesperson said: “We can confirm that we are making changes to our supplier payment terms. We really value our relationships with suppliers and are working with our partners on the changes.
“We are in the process of communicating the details of the new terms that we believe will offer suppliers greater flexibility.”
The Government recently held a consultation on how to deal with late payments and its response is expected next month.