By Giorgos Lampiris
Reduction of inventory and stocks in warehouses, some of the large Greek supermarkets are considering the possible legislation of a regulation for repayment of basic consumer goods within less than 60 days from the date of invoicing, in order to limit the phenomenon of post-dated checks and late repayment, which in many cases can even reach 140 days. In fact, the example of Marinopoulos was typical in 2016, when the petition to be included in the bankruptcy code of the largest Greek supermarket chain until then was filed, where of the total 1.32 billion euros that were its debts, 722 million euros were debts to its suppliers. We remind you that the existing repayment legislation for perishable (refrigerated) products stipulates that the time must not exceed 30 days.
At the same time, the Commission has put on the discussion table the adoption of a directive for the payment of all suppliers in the entire commercial sector within a period of no longer than 30 days. We remind you that the average payment of suppliers from supermarkets in 2022 was around 100 days on average for their entire range of products (variable or non-variable).
In the European Union, there is a related proposal – a discussion on the repayment of suppliers in 30 days, where all 27 member countries have sent a negative proposal. What most countries prefer as a solution with the latest data, is to adopt a directive only for small and medium-sized suppliers.
The proposal that the Union of Supermarkets has sent to the Ministry of Development on this matter is also typical, where it states that if there is a relevant regulation, businesses with a consolidated pan-European or worldwide turnover of more than 350 million euros should be excluded from it. This practically means that, based on the proposal of the Union of Supermarkets, multinational companies with a de facto turnover of more than 350 million euros should not be part of the “equation” and should be paid on the same days as smaller businesses .
At the moment, however, the relevant discussion has been interrupted due to an imminent change of members of the European Parliament after the upcoming European elections. This temporary postponement, combined with the objections brought by the European Union’s intention for 30 days, is expected to put the issue on a much longer-term basis than originally expected.
Visible possibility of stock reduction and waiting period for slow-moving goods
On the other hand, an executive of a large supermarket chain stated a few hours ago in a circle of journalists that the company he cooperates with, if new legislation is passed in Greece that will set the repayment at 60 days for the rest of the goods except perishables, will consider the possibility of reducing the stock of the products, so that they do not remain in its warehouse. He emphasized that it is possible that products that are not easy to sell will also be affected, where the possibility of being removed from the shelves of his company’s stores is visible. Another move that the same chain will consider is to give a limited period of time for a product that does not move much, after negotiation with the suppliers. He cited as an example the policy of overseas supermarkets where when a product code does not “move”, it remains on the shelf for 15 to 20 days and is then withdrawn.
The same person stressed that managing the new data brought by the sharp reduction in the repayment time of supermarkets to suppliers requires an adjustment time of one to two years, pointing out at the same time that the corresponding transition in Italy lasted three years. “When a market is ‘built’ on this model of transactions between supermarkets and suppliers for 40 years, it is necessary to have a sufficient period of adaptation to the new data,” added the same person.
However, the data is different in cases of multinational companies, where, as he pointed out, the payment of a specific company in the detergent and personal care sector is made within 7 days, with a 3% discount on the invoice from its side. Pointing out, among other things, that with the new data his chain will try to maintain the 3% discount and that the repayment be made in the time that will be set by the legislation and therefore in a longer period than today.
