As Tesco's tough negotiations with its suppliers continued this week, Reckitt Benckiser boss Bart Becht has said he believes the supermarket giant may drive small suppliers out of business.
With Tesco seeking price cuts, one-off contributions and extensions to payment terms, the household goods CEO said the survival of small suppliers was a "key question" as Tesco attempted to "squeeze more out of the suppliers."
"The question is [if] in the long term they drive the smaller suppliers out of business, that is the key question and it might happen," Becht told The Financial Times.
Attempts by Tesco to extend payment terms on non-food items from 30 to 60 days were unfair in high turnover categories, he added.
"I don't think it is reasonable - no, it is not. There is absolutely no logic to that. They turn over the inventory [in] much less [time] than 60 days, so why should they have 60 day payment terms," said Becht in a highly unusual attack on his most important customer.
The Grocer continues to receive complaints from suppliers alleging Tesco is abusing its power. One small supplier said he was being told to cut the price or make a one-off cash payment to Tesco - or he would be delisted.
"It's disgusting. I don't understand what is happening. Our brand has been a success for Tesco, it is growing, but they don't seem to care.
"I don't know what Tesco stands for anymore. I thought it was the supermarket for all the people, but it's turned itself into a giant discounter."
Another had been told to make a contribution amounting to 15% of his company's annual turnover, or see the amount of SKUs halved. He was told he had until today to decide. "I am going to take my punishment," he told The Grocer "and take a cut in SKUs. I have no further to go in terms of price. Selling stock at a loss - even to Tesco - is a mug's game.
Lucy Neville-Rolfe, Tesco's corporate and legal affairs director, said: "When commodity prices rose, we increased prices to suppliers. Now that prices have fallen, we are working with suppliers to ensure that this is reflected in what we pay them so that reductions can be passed back to customers."
A spokesman added; "we are especially mindful of the impact on our small suppliers and stand ready to discuss any problems with them."