Ranjit Boparan is flexing his muscles again - this time with 2 Sisters Food Group customers - as he shortens payment terms for a number of retailers and wholesalers from next month.
2 Sisters will implement shorter payment terms from the beginning of July, cutting them from up to 60 days to as little as 14, The Grocer understands. 2 Sisters has already informed retailers of the changes.
The chilled specialist has enjoyed relatively short payment terms from the major multiples. However, it wants to reduce terms for the rest of its customer base - including wholesalers and symbol groups - which have, in some cases, been higher, as it works to free up cash.
Affected retailers said while shorter terms were less of an issue for high volume short-shelf products, they could prove challenging for ambient products that were not sold on as quickly. One long-term customer was outraged. “There’s been no negotiation, it’s just been imposed. I feel like they’re taking liberties.”
The company insisted it was “a negotiation” and that it continued to discuss the new terms with each customer.
A spokesman for 2 Sisters said: “We’re known for driving efficiency so we can deliver at the lowest cost for our customers.”
2 Sisters was leveraging its scale and range to put itself in a stronger position to dictate pricing and terms with certain customers, said Sentinel Management Consultants CEO David Sables. “Every single supplier would do the same thing in their shoes,” he added.
The changes follow Boparan’s pledge last year to streamline his supply chain with the integration of 2 Sisters and Northern Foods in a bid to reach £3bn in sales by 2015. 2 Sisters has slashed the number of suppliers, from 4,500 to 2,500 and late last year, extended some of their payment terms.