Big firms exerting their market power over payment terms

We discuss market power and the power of buyers on pages 44-46 of our book.  And one aspect of this is having an ever higher profile in this election year – how big firms make their smaller suppliers wait a long time before being paid.  Latest in the firing line is AB InBev, who brew Budweiser, Stella and Boddingtons.  They have extended their payment terms to 120 days from the end of the month in which an invoice is issued.  The rights and wrongs of this are explored on the BBC Business website (here).

Politicians are thinking of passing legislation to prevent large firms exerting too much power over their smaller suppliers. But it may be that public opinion is more effective in curbing the more aggressive firms.

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