Scotland’s biggest whisky maker rapped for late payments to suppliers

Five leading companies, including four divisions within drinks giant Diageo, have been formally removed from the Prompt Payment Code (PPC) after falling significantly short on commitments to pay their suppliers on time.

They include Diageo Scotland Limited, Diageo Global Supply IBC Limited, Diageo Northern Ireland Limited, Diageo Great Britain Limited and Unilever UK Limited. All had the opportunity to voluntarily withdraw their membership but did not engaged with the Small Business Commissioner who runs the PPC on behalf of the Department for Business, Energy and Industrial Strategy (BEIS).

The voluntary code requires companies to pay 95 per cent of invoices within 30 days to their small suppliers, and pay 95% of all invoices within 60 days.

Latest reporting data shows that Diageo Scotland was paying 42% of invoices within 60 days; Diageo Global Supply IBC was paying 32% of invoices within 60 days; Diageo Northern Ireland was paying 33% of invoices within 60 days; and Diageo Great Britain was paying 36% of invoices in 60 days.

READ MORE: Whisky giant Diageo posts profit rise as drinkers return to the bar

In addition, multinational consumer goods company Unilever UK was paying 51% of invoices within 60 days.

“It’s always disappointing when a company can no longer reach the payment standards set by the Prompt Payment Code,” small business commissioner Liz Barclay said.

“The Code is there to make sure that suppliers get paid as quickly as possible and when firms leave or are removed there is a risk that payments to suppliers will be slower. We will work with the firms mentioned to get them back onto the Code as quickly as possible should they wish to return, because that’s to the benefit of the suppliers and to the companies themselves”.

READ MORE: Increase in late payments piles pressure on small Scots firms

From September 2019, any organisation that bids for a central government contract worth more than £5 million a year must demonstrate it has effective payment systems in place to ensure a reliable supply chain. Organisations that do not pay 95% of their invoices within 60 days could be prevented from winning contracts.

The seven-strong PCC compliance board, led by chairwoman Yvonne Gale, said: “The removal of these companies from the Code demonstrates that we will crack down where we find that signatories are not paying suppliers on time.

“We want to see all Code signatories adhering to the commitments they’ve sign up to and to see continual improvement in payment behaviour”.


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