GlaxoSmithKline (GSK) Enters the Small Business "Hall of Shame"
1/22/2013 7:55:50 AM
Cost cutting is an age-old practice and the pharmaceutical industry has certainly sharpened its skills in recent years. Now, though, a move by GlaxoSmithKline to increase the time by which payments are made to some of its suppliers has earned the drugmaker the distinction of being named to the ‘Hall of Shame’ by the Forum for Private Business, a group that represents small businesses in the UK. According to the organization, Glaxo (GSK) recently decided to take up to 95 days to pay suppliers instead of 60 days, a move that the Forum has called ‘bully boy behavior,’ and declared this amounts to ‘poor payment’ practices. The group also noted the drugmaker two years ago had increased payment time to 60 days. “When suppliers receive a letter like the one GSK’s suppliers are starting to receive, few have any choice but to agree to the new payment terms. There is little room for bargaining through fear they will lose the business, and no small firm wants that in the current economic climate,” the Forum says in a statement on its web site. “What makes the GSK case all the worse is the sheer size and profitability of the firm – the fourth biggest pharmaceutical company on the planet. This is not a business struggling to make its way in the world. “It is, however, a company concerned only with boosting its own profits whatever the cost to smaller firms, and has scant regard for the consequences of its actions. Most people will see this as the worst type of corporate greed imaginable. GSK can’t even argue they’ve not got past form. Only two years ago they increased supplier payment terms to 60 days, and now this. They are relentless.