Premier Foods ‘Pay To Stay’ Demand Slammed

Premier Foods ‘Pay To Stay’ Demand Slammed

Premier Foods has been criticised for asking its suppliers for payments to continue doing business with the firm.

The practice – known as pay and stay – was described by one supplier as “blackmail”.

A report by BBC’s Newsnight programme claims that the company has received millions of pounds from its suppliers in this way.

responding to the allegations., Premier Foods said it was confident the scheme did not break any rules under competition law. The government said it was “concerned by recent reports”.

The company, which owns brands like Mr Kipling, Ambrosia, Bisto and Oxo, demanded the payments from suppliers across the country.

The BBC said that a letter sent by chief executive Gavin Darby, dated November 18.

He wrote: “We are aiming to work with a smaller number of strategic suppliers in the future that can better support and invest in our growth ideas.”

He added: “We will now require you to make an investment payment to support our growth.

“I understand that this approach may lead to some questions.

“However, it is important that we take the right steps now to support our future growth.”

But when a supplier raised questions in an email about the annual payments, another member of Premier’s staff replied.

“We are looking to obtain an investment payment from our entire supply base and unfortunately those who do not participate will be nominated for de-list.”

The company announced a profits warning in October as a supermarket price war takes its toll on food producers. It added that third-quarter sales fell 4.7 per cent.