Scottish arm of drinks giant Diageo struck off code after 'failing to pay suppliers on time'
Whisky giant Diageo’s Scottish business has been removed from the Prompt Payment Code after failing to pay its bills on time.
The operation is one of four divisions of the global drinks firm to be struck off, along with consumer goods giant Unilever UK.
The voluntary code requires companies to pay 95 per cent of invoices within 30 days to their small suppliers and pay the same percentage of all invoices within 60 days.
Public body the Small Business Commissioner pointed to data showing that Diageo Scotland was paying just 42 per cent of invoices within 60 days.
Commissioner Liz Barclay said: “It’s always disappointing when a company can no longer reach the payment standards set by the Prompt Payment Code.
“The Code is there to make sure that suppliers get paid as quickly as possible and when firms leave or are removed there is a risk that payments to suppliers will be slower.
“We will work with the firms mentioned to get them back onto the Code as quickly as possible should they wish to return, because that’s to the benefit of the suppliers and to the companies themselves.”
The UK government has set a standard of 95 per cent of all supply chain invoices to be paid within 60 days for organisations who want to do business with government. Suppliers who do not comply with this standard could be prevented from winning future government contracts.
A spokesperson for Diageo said: “While the code has changed, our commitment to ensuring all suppliers are paid on time has not. In our latest report, 97 per cent of our SME [small and medium-sized enterprise] suppliers and 93 per cent of all suppliers were paid on time.
“We will continue to work hard on our payment practices, with an acute focus on SME suppliers, reflecting the original intent of the code.”
UK small business minister Paul Scully said: “As our small businesses recover from the pandemic, the last thing they need is for some big firms to hold back the cash that is owed to them.
“I urge the companies that have been removed from the code to get their acts together to improve their performance.”