Boots tries to have it both ways on CSR
How can a company like Alliance Boots commit itself to the principles of corporate social repsonsibility yet extend its payment terms to small suppliers to 75 days? That's the question posed by my fellow blogger Martin Williams of Graydon UK.
The website European Leaders in Procurement suggests Boots' payment terms are even more draconian: 'It will pay its suppliers up to 105 days after billing and (if that wasn’t enough) will then charge a 2.5 per cent “settlement fee”. It’s enough to make the eyes water, and despite Alliance Boots claiming that their procurement standards “are in line with those of other groups of similar size and scale”, the news will come as a hammer blow to suppliers who are coming under increasing pressure as times get tough.'
Like Martin, I fear moves like this make big business appear every bit as cynical as their critics suggest.
CSR isn't CSPR and at the very least demands that words are not immediately contradicted by action.
That's nothing short of criminal. A 2.5 per cent "settlement fee"? Just how is that different from a kick-back?
Posted by Richard Young | April 8, 2008 8:59 AM
One supplier who spoke to the Forum for Private Business about this didn't use the word criminal. But he did say: 'This could effectively mean we will be paid up to 105 days from the date of an invoice, as well as their taking 2.5% for the privilege.' Not surprisingly he didn't want to be identified as he would presumably prefer to be paid late and at a discount than to be dropped as a supplier altogether. According to the FPB Boots is one of about 14 (largely retail) companies applying discounts. Not a healthy state of affairs.
Posted by Damian Wild | April 8, 2008 9:49 AM