The body representing UK client marketers has hit back at claims its members are riding roughshod over agencies and suppliers with new extended payment terms, saying clients are working hard to ensure firms get paid regularly.
ISBA has remained silent on the issue since news first broke last week that Mondelez – the company behind brands such as Cadbury, Oreo, Ritz and Kenco – had extended its payment terms to 120 days, meaning some business could wait up to six months to get their money.
The move followed Procter & Gamble, Johnson & Johnson and Anheuser-Busch InBev all pushing back payments from 45 days to 75 days and triggered accusations that clients are exploiting their suppliers.
Marketing Agencies Association boss Scott Knox – who has been lobbying the Government to clamp down on the issue – claims some agencies are waiting up to150 days for payment after project completion.
Meanwhile, the IPA has called the move “nonsensical”, with finance chief Alex Hunter adding: “”With interest rates at an all-time low there is no real commercial value in unilaterally extending payment terms.
“Those at the receiving end of this pressure are precisely those hired to add value to these major companies through their commercial creativity.”
But ISBA director of consultancy and best practice Debbie Morrison has now claimed members want to work with agencies to address the issue.
She said: “Almost every client we speak with is looking closely at this issue and working with their finance teams to find ways of providing the latitude that their agencies require. It is in their interests, after all, that their agencies are solvent and able to do their job.”
Related stories
Agencies face 6-month wait for pay
