THE WHAT? Unilever is facing expulsion from the UK government backed Prompt Payment Code unless the company improves its payment performance, according to a report by The Times.
THE DETAILS The code promotes fair treatment of suppliers, with Small Business Commission Liz Barclay calling on Unilever to speed up its payment or alternatively leave the code.
As the second most valuable company in the FTSE 100 share index, Unilever was among 20 companies suspended from the code in 2019 after it failed to pay 95 percent of bills within 60 days. While others have had their suspensions lifted, Unilever has failed to make enough progress.
The commissioner is now said to be looking at ways to ensure multinationals can meet the strict regime.
THE WHY? Unilever UK was said to be taking 60 days to pay invoices, which has now dropped to around 56 days. However, the multinational stated that the code no long allows an exemption for bigger suppliers to the 60-day rule.
A Unilever spokesperson said, “We remain fully committed to paying all our suppliers fairly and on time, with all our payment terms mutually agreed up-front. We believe we are still fully honouring the spirit of the code. Since 2019, Unilever UK has paid more than 96 per cent of invoices on time.”
Meanwhile a Commissioner spokesperson said, “Diageo and Unilever were suspended from the code following their reported payment data reflecting that they had not met the code requirements. We would need to see an improvement in their payment practices for them to be reinstated. We are actively engaging with both companies.”