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AB InBev under fire over payment contracts

AB InBev has been blasted by the UK’s business minister for making small suppliers wait up to four months for payment after their products are delivered, branding its terms “entirely unacceptable.”

Carlos_Brito_(AB_InBev)
Carlos Brito, chief executive of AB InBev

AB InBev, which brews Budweiser, Stella Artois and Boddingtons, regularly pays its smaller UK suppliers four months after receiving their products or services, as reported by the BBC.

While the terms are mutually agreed with suppliers, one firm has said it can no longer afford to trade with AB InBev, while MP Matt Hancock, the UK’s business minister, has called the practice simply “unacceptable”.

Brewpack, based in Surrey, supplies conveyor belt systems to large drink manufacturers. It told the BBC that no other firm takes as long to pay as AB InBev, whose payment terms stretch 120 days from the end of the month in which an invoice is issued.

In a statement, AB InBev said: “Payment terms are always set as part of commercial negotiations and established in mutual agreement. Elements that influence the payment terms include price, quality, size of the supplier, type of product, service and volume.”

However MP and business minister Matt Hancock said making small businesses wait an unreasonable time for payment was “entirely unacceptable”, announcing plans to introduce legislation this year to name firms that demand lengthy payment terms.

He said: “These payment practices hit small businesses hardest and I am determined to stamp them out. We are already making the whole payment process more transparent so small business can track the payment practices of larger firms, and hold them to account. We are consulting on ending pay to stay practices, and from the end of this month 30 day payment terms will be required in all public sector contracts and down their supply chains.”

Last year AB InBev made a global profit of £11.7bn ($17.9bn) with its chief executive, Carlos Brito, taking home a bonus of £200m.

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