Carlsberg criticised for new supplier terms

Danish brewer Carlsberg has been slammed for its “grossly unfair” new supplier terms that will see payments delayed for over three months.

Letters sent by Carlsberg to its suppliers revealed an extension to its payment deadline (Photo: FPB)

In letters sent to its suppliers, Carlsberg announced it would be extending its payment deadline to 93 days – a breach of EU directives over supply contacts.

One letter signed by Bengt Erlandsson, a senior vice president at Carlsberg, has been released to the media. It directs suppliers to change their invoices to reflect the new 93-day payment deadline by 1 July 2015.

The new terms have been criticised by the Forum of Private Business, which represents small UK firms. It has added Carlsberg to its “Hall of Shame”, which lists companies that take over 60 days to pay their suppliers, breaking European guidelines.

In correspondence with the FPB, Carlsberg said it was “surprised” at the backlash over the new contracts, and said that “parties are free under English law to agree payment terms longer than 60 days.”

Ian Cass, managing director at the Forum of Private Business, said the letter “adds insult to injury”.

Kasper Elbjørn, media relations director for the Carlsberg Group, told the drinks business the change was “in line with the terms of other similar companies”.

He said that the letter released to the media was meant for “big global suppliers” rather than small producers, and that the policy “takes into account that suppliers are different.”

In its Q3 results posted today (11 November), Carlsberg said it is working to create “one integrated supply chain supported by a uniform system and set of processes.”

“The new contracts form part of a “complexity reduction initiative” to “deliver more value to shoppers”, it said.

Its net revenue grew by 3% and its operating by 9% in the three months to 30 September, but volumes continue to decline, shrinking by 3% in the quarter and 4% so far this year.