Labour says it will push for so-called ‘cash for business’ charges by major retailers and food firms to be outlawed if it wins at the polls in May.
The pledge comes after the BBC revealed that Premier Foods – owner of the Mr Kipling, Ambrosia, Bisto and Oxo brands – had written to its suppliers requiring them to make an “investment payment” to the company or be “nominated for a de-list”.
While the company says it is operating fully within the law one of its suppliers said that the practice – known as ‘pay and stay’ – amounted to “blackmail”.
Commenting on the development, Liesl Smith of the Federation of Small Businesses, told the BBC: “This is the first time we’ve seen anything so blatant. We think (this practice) is very unjust and it is crippling small business.”
Labour’s shadow business minister, Toby Perkins, said on Radio 4’s Today Programme: “Labour pushed to outlaw companies charging to stay on their supplier list, but alongside steps to prevent late customer payment, they were rejected by the government.”
