Disastrous corporate communications by the drinks giant Diageo. It has told its suppliers that they won’t be paid for 90 days, up from 60. As a result it has been expelled from a government-backed scheme to promote good practice by paying on time, the Prompt Payment Code.
Following in the footsteps of Heinz
Diageo follows Heinz in lengthening its payment time to suppliers.
Diageo wrote to suppliers saying that, to improve its cash flow in order to invest more, it is making them wait 50% longer.
Damaging suppliers’ cash flow
What about the cash flow of its suppliers?
Diageo says it values its suppliers and sought to have open and fair relationships. If I follow my intention to boycott Heinz, then it’s no Guinness, no Smirnoff and no Baileys for me.
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