This is borderline illegal. Suppliers are legally entitled to charge for interest at payment which take over 30 days. Of course, the relative size of supplier and buyer means that few suppliers feel able to exercise this option (alienating the buyer) and this allows the larger institution to ‘bully’ in this way. Do you think the government will be mentioning it? The line about maintaining Tesco’s cashflow is plain hilarious. Corporate action of this sort is one of the ‘invisible’ effects of the hard economic times the country is going through. Via Lloyd.
UPDATED: 1pm. More evidence of what is going on in the real economy. This story nails the impact that our current system of non-personal relationships between business (producer) – buyer – and large financial institutions can easily lead to. The story is from The Daily Telegraph.
I dont think suppliers are legally entitled to charge interest on payments which take over 30 days, rather they can charge interest (if agreed in their terms of business) if the buyer does not pay within the agreed payment time. this could be 2 days, 2 weeks or 3 months! But i do agree Tesco are bullying their suppliers, in order to pass the savings on to their customers. Many people moan about this, and then continue to buy their cheaper products, the best way to combat this is to shop at smaller high street stores / markets or go with one of their competitors, who will begin doing the exact same things as soon as they get to be where Tesco are now!