St Albans based Premier Foods criticised over cash requests

St Albans based Premier Foods has come under fire following its controversial 'invest for growth' pr

St Albans based Premier Foods has come under fire following its controversial 'invest for growth' programme - Credit: Archant

A St Albans based food giant has come under fire after it was revealed they have requested a compulsory ‘investment payment’ from their suppliers.

Premier Foods, whose headquarters are based at the bottom of Holywell Hill, asked suppliers to make the payment to ensure they stayed on their approved supplier list.

The company, who are the UK’s largest food producer and own brands such as Mr Kipling, Ambrosia and Bisto, recently sent letters to suppliers outlining the payments, which reportedly do not necessarily guarantee any future contracts.

It is also apparently unclear how the payments have been calculated.

Premier Foods launched their ‘investment for growth programme’ to help turnaround the business last year, which a spokesperson said included a commitment to halve the number of their suppliers and develop more strategic partnerships focused on mutual growth.

He said: “As part of the programme, our suppliers are asked to make an annual voluntary investment to help fund our growth plans.

“In return, our suppliers benefit from opportunities to secure a larger slice of our current business. They also stand to gain as our business grows in the future. In the current challenging environment, the support of all of our suppliers is crucial.

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“We are delighted with the positive response we have had from many who are actively engaging in building a new partnership with us, including many small companies. Indeed, many of our suppliers have seen their business grow as a result”.

But John Allan, national chairman of the Federation of Small Businesses, said: “Premier Foods should be ashamed of themselves. Driving a hard bargain with your suppliers is one thing, but demanding a cash gift under the threat of delisting, is downright unfair.”