The retailer says the faster payments will support cashflows during a difficult time for the British economy.
Morrisons is also temporarily re-classifying a smaller supplier from those with £100,000 of business-a-year with the company to those with £1 million of business. This will mean that an extra 1,000 small food businesses will qualify for these new payment terms.
The move will help businesses that provide up to £1m of turnover with Morrisons, including suppliers of local food and farmers that deal direct with Morrisons, such as those providing eggs and livestock.
NFU Chief Food Chain Adviser Christine McDowell said: “We welcome the fact Morrisons has taken swift action to look at ways in which they can support British farmers.
“For any of our members who supply Morrisons, this move will significantly help them to manage cashflows in these unprecedented times to cover unexpected business costs and ease financial pressures.”
David Potts, Chief Executive of Morrisons, said: “We are Britain’s biggest single foodmaker and we want to be there for the smaller foodmakers, farmers and businesses that supply Morrisons. We’re a British family business and we will be doing our best to support them through this challenging period.”
DEFRA Secretary of State George Eustice said: “These measures will support our farmers and food producers in their vital work of feeding the nation.
“We already have a highly-resilient food supply chain in this country and I am continuing to work closely with Morrisons and other retailers on their response to coronavirus. The government has pledged £30 billion in this year’s Budget for those affected and we’ve been clear that we will do whatever it takes to support people and businesses.”
Morrisons has around 3,000 small suppliers including 1,750 farmers that will benefit.
Morrisons will start the temporary payment terms next week and it is expected they will last until the end of May before being reviewed
Notes to editor:
- Morrisons will start to process payments immediately with the aim of releasing payment to the banks within 48 hours.