Fonterra is right to reduce payment times

1 MinutesBy NZ Trucking magazineApril 17, 2018

Road Transport Forum chief executive Ken Shirley acknowledges the action taken by Fonterra to reduce its payment times to small and medium suppliers and contractors.

“Fonterra‘s previous policy was blatantly unfair to these smaller businesses and was really just using them as a cheap form of finance,” says Shirley. “It was quite an outrageous practice and we are pleased that they have dropped it.”

Shirley says it is good to see Fonterra bucking the growing international trend for large companies to extend payment times.

“Over the past few years and on both sides of the Tasman there have been a number of examples of larger companies using this kind of corporate bullying to their own advantage and to the detriment of small businesses that depend on them.”

The RTF has been working on a legislative solution to the issue of deferred payments.

“Our proposal is based around the unfair contract term provisions that already exist in the Fair Trading Act,” says Shirley. “By extending the provisions that currently exist to protect consumers in consumer-based contracts to business-to-business contracts, large companies would be unable to force small businesses into unfair contract terms.”

Shirley says the RTF look forward to meeting with Small Business Minister Stuart Nash in the next few weeks and working with his officials on this proposal.