Fonterra ‘Named and Shamed’ Over Invoice Payments Delay
Fonterra’s pledge to pay bills more promptly is being welcomed by trucking companies but they say far more is needed.
The dairy giant has pledged to pay all New Zealand suppliers with an annual spend of up to NZ$300,000 (FJ$ 447,121) or more by the 20th of the month following the invoice date.
Its comments came after years of complaints that small firms were being stuck with late payment of invoices by large corporations. The reason for this practise was that corporations could keep their coffers full - and interest-bearing for as long as possible by paying a bill on the last possible date.
Small firms said this put their cash flow at risk.
Fonterra publically pledged on Tuesday not to do this any more. But the Road Transport Forum said more was needed.
Small and medium trucking companies along with others, had long been affected by this policy, and the chief executive of the forum, Ken Shirley, did not mince his words. “We are very pleased that Fonterra has made this move but I would observe they had to be named and shamed into doing this,” Mr Shirley said.
“What they were doing was morally reprehensible, but they are not alone. There are other companies doing the same, not just in New Zealand but globally.”
Ken Shirley said he had a meeting scheduled with the Minister for Small Business Stuart Nash. He would put a simple proposition to him: amend the Fair Trading Act so that it applies to small producers as well as end consumers.
“At the moment our Fair Trading Act is designed to protect consumers and this is good,” he said. “But when small businesses are reliant on large businesses that are sometimes pseudo monopolies, you get a horrible imbalance of power, and small businesses can suffer the same jeopardies that a consumer can do.”
Mr Shirley said regulation was needed to control this risk.
The dairy giant has pledged to pay all New Zealand suppliers with an annual spend of up to NZ$300,000 (FJ$ 447,121)