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In Australia, Regulators Uncork Pressure On Winemakers For Timely Payments

Roundup of late payment news

A backlash against lengthy payment terms for grape growers may be fermenting in Australia. Elsewhere, in the U.S., some political campaigns appear to be stretching payment terms, and late payments continue to plague the U.K., especially for government contracts.

In the land down under, grapes of wrath may be fermenting against major winemakers about payment terms.

As reported by the Sydney Morning Herald, the Australian Competition and Consumer Commission has singled out payments that have been made to growers.

In  a bit of granular detail, ACCC Deputy Chairman Mick Keogh illustrated, in remarks to industry stakeholders at a conference, the impact of late payments. “As a wine consumer, I think I should be able to select a bottle of wine off the shelf, and decide what it’s worth. I pay one-third of that when I leave the store. I’ll pay a second one-third payment in six months, and I’ll pay the balance when I get around to drinking it, which could be years in the future,” he said, according to the site, where such extended terms are in evidence within the wine industry.

He said that such lengthened payment terms should be phased out of supplier contracts, and that “a best practice standard of payment within 30 days of grape delivery should be adopted by all winemakers with processing capacity over 10 000 tonnes.”

The remarks came after the ACCC said in a report that wine grape growers look to gain steady buyers for their production and as such sign on to supply chain agreements that are unbalanced — and have to wait several months to get paid by their large winemaker customers.

In response, according to the site, Tony Battaglene, chief executive of Australian Grape and Wine, said the regulator’s  comments “highlighted a need to improve price transparency and standardize quality assessment measures in contracts. I believe that there is an opportunity to provide improved market information to growers to help improve decision making.”

In the States

Here in the states, late payments also are making appearances on the campaign trail.

The Daily Beast reports that a number of campaigns have stretched payment terms, ostensibly in an effort to put “the best possible spin” on financial health, making coffers appear flush with cash.

Consider one finding of the site, where Minnesota Democratic Sen. Amy Klobuchar’s presidential campaign “made regular payments to its staff and vendors,” on a daily basis through the end of the first quarter — but on April 1, spending “exploded.” The average daily spending went from around $55,000 to as much as $624,000 on the first day of April, with a $300,000 payment to a digital company. Klobuchar didn’t respond to the site’s requests for comment. In another example, staffer paychecks may have been stretched, as no payments were sent at the end of June.

“There’s nothing improper or problematic with structuring campaign payments in order to present the best possible picture of its financial situation,” contended the site.

Other campaigns skipped end of June paychecks, according to the site, which drew on data from federal filings. Some campaigns responded that payments were sent after June 20, which fell out on a Sunday.

In the United Kingdom

Across the Pond in the United Kingdom, the impact of late payments lingers.  A report from research firm Tussell states that only six of the government’s 36 most strategic suppliers — are compliant under new payment rules that mandate smaller suppliers be paid within 60 days. Under the terms of the Prompt Payment Code, as has been previously reported, and as relayed by diginomica.com, Tussell has found that contracts worth as much as 90 billion pounds have been awarded to suppliers that have had poor payment practices through the past several years, dating back to 2015.


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