Marks and Spencer is to launch a probe into its deals with food and drink suppliers amid claims that the latter are getting their own back over tough contract deals by hiking up the value of invoices for new business.
The Grocer has discovered that a decision by the retailer earlier this year to renegotiate terms and pay only 98% of the value of suppliers’ invoices may have backfired.
Suppliers are understood to be turning the tables by renegotiating all contracts for new goods at a higher level.
One supplier said it had been delighted when it secured a deal to start supplying the retailer for the first time at the start of this year. However, it said relations soon soured after M&S started knocking 2% of the value of its invoices without warning. A spokesman for the supplier said: “There was nothing in the 128 pages of terms and conditions saying they could do this and we were just told it was a new edict from up high.”
However, both it and another supplier said they had turned the tables on M&S by inflating the cost of new supply contracts “to redress the balance”.
One said: “This is their own fault because, to use childish parlance, they started it. We are only taking back what they took from us in the first place.”
A spokeswoman for M&S said the retailer had merely introduced “standard business terms that applied to all our business customers” in April.
She also insisted that the retailer’s buyers were “astute enough to know what the right prices” were for new contracts, but added: “We will fully investigate this claim but do not believe it is a widespread issue.”
Simon Mowbray