According to the UK's Federation of Small Businesses (FSB), approximately one in five of the firms it represents suffers from supply-chain bullying.
Some 17 per cent of companies surveyed by the FSB claimed they had experienced some form of supply-chain bullying in the past two years. Among the practices were 'pay to stay' demands, whereby suppliers are asked to make cash payments to maintain their contracts, it has been reported widely in the UK press.
With about 5.2 million small businesses in the UK, the figures would suggest in the region of about a million are facing bullying of some kind.
"Big companies are putting small companies in a position where they can’t fight back," John Allan, national chairman of the FSB, told The Guardian. "The sense I get from talking to our members is that small businesses are fast approaching the breaking point.
"Brands that think they can continue to squeeze their suppliers with impunity may get a nasty shock when what they are doing comes to the attention of their consumers," he added.
Another example of the bullying tactics was making suppliers wait up to 120 days for payment, rather than the standard 60 days, which is required under EU law.
Larger companies would obtain a lower price by unilaterally shedding 3 per cent off their own bill for paying the supplier early, or even on schedule.
"When the public think of their favourite brands, they are unlikely to connect them with the sort of immoral payment practices which are becoming all too common across an increasing number of industries," said Allan.
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