JD Wetherspoon has told suppliers it does not intend to pay them until its pubs are open for business again.
The request is likely to cause anger and fear among its supply chain as partners face the prospect of not collecting money owed for weeks, if not months.
The 900-strong pub group notified suppliers of the “moratorium” on payments this week in an email understood to be signed by chairman Tim Martin.
He has promised that the chain will clear outstanding payments, but has not set a timeframe.
A spokesperson for JD Wetherspoon told FEJ the request was designed to help the business get through the crisis and said suppliers were being offered the chance to discuss what is being proposed.
“Wetherspoon has written to suppliers saying that in extraordinary times it is asking suppliers to assist by waiting for payment until the pubs reopen so that the company can carry on.
“Many of the suppliers have been with Wetherspoon for 30 years and the company wants to carry on that relationship for another 30 years. It has given suppliers a contact numbers to call to discuss this further and that it will aim to help out wherever possible.”
The scale of Wetherspoon’s business – worth more than £1.8 billion a year in sales – means the ripples of this will be felt more widely in the market, particularly among those who regard it as a major customer.
Industry leaders have already raised concerns over the impact of payment delays or non-payment on the supply chain during the crisis.
Trade associations FEA and Ceda recently called on the government to ensure that where operator funding is made available there should be a mandatory obligation to ensure that contractual payment obligations are met in order to support the supply chain.
They have also asked for supply chain businesses to have access to funding to bridge the gap caused by non-payment by customers.