Holland & Barrett accused of treating suppliers ‘shabbily’

The small business commissioner and senior MPs have criticised health food chain Holland & Barrett for treating its suppliers “shabbily” as part of a crackdown on companies that take months to pay invoices.

Paul Uppal has highlighted poor supplier payment practices at the Nuneaton-based company following the publication of his report into a late payment complaint made by a small business. He also condemned the retailer for not cooperating with his investigation.

The official complaint was logged with the Small Business Commissioner by the London-based technology consultancy after Holland & Barrett failed to pay a £15,000 invoice for a Search Engine Optimisation project within the agreed payment terms.

The invoice took 67 days to be paid, which was outside of the contractual agreement of 30 days.

Following the intervention of the Commissioner, Holland & Barrett paid in full 28 days after the complaint was submitted.

Analysis of Holland & Barrett’s Payment practice reporting (PPR) data highlighted that the company takes an average of 68 days to pay their invoices and 60% of invoices were not paid within agreed terms.

Uppal said: “The Government is determined to end the scourge of late payments and bring about a cultural change to deliver responsible payment practices.

“Holland & Barrett’s refusal to co-operate with my investigation, as well as their published poor payment practices says to me that this is a company that doesn’t care about its suppliers or take prompt payment seriously.

“The request for anonymity by the business owner demonstrates small businesses remain in fear of challenging large businesses on their payment practices for fear of retribution. This should be a warning to suppliers that I will keep a spotlight on businesses that are not addressing late payment and use the powers available to me to highlight poor payment practice.”

Holland & Barrett said: “Our agreed payment terms are a standard 90 days, although in fact our average payment time is around 60 days. This is a single complaint and is in relation to one invoice for £15,000 for an IT supplier that was lost in our payment process in the run-up to the busy Christmas period. Once we established what had happened we resolved it very quickly.

“We work hard to help many of our suppliers with easy payment arrangements as many of them are small and just entering the market – Beauty Kitchen, for example, is one of a number of new and smaller suppliers where we have zero-day payment terms or payment by return to assist with their cashflow.”

Rachel Reeves MP, chair of business, energy and industrial strategy committee, said: “Consumers would be appalled to hear that a big name on the high-street such as Holland & Barrett is treating their suppliers so shabbily. It is outrageous that a company takes on average 68 days to pay its invoices and pays 60 percent of them outside of agreed terms.

“These actions show that it is not only a Parliamentary Committee and the Small Business Commissioner which Holland & Barrett hold in contempt but small businesses too. The behaviour of Holland & Barrett in these instances underlines the BEIS Committee’s call for companies who flout the rules to not only be named and shamed but also subject to fines.”