Last month the BBC reported that Tesco had emailed its suppliers asking them to agree to pay a “fulfilment fee” for products that Tesco sells online. Whilst small businesses would be exempt from this requirement, Tesco wants to impose on those with turnovers of £250,000 or more a fee which the BBC understands to be between 5 and 12 pence per item or face possible penalties.
As businesses continue to deal with challenging trading conditions including inflation rates of 10.1% in the year to March, suppliers are increasingly likely to be faced with calls from their counterparties to amend the terms of their agreements. Rather than wait for this to happen, traders would be well placed to examine their contracts now to determine their rights and obligations when it comes to amendment so that they are in as strong a position as possible to address any requests to change contractual terms. Equally, those wanting to amend their trading terms should make sure that they know their contractual amendment rights before beginning the amendment process.
Tesco has said that its emails to suppliers are merely “the start of conversations”. Whether you are making the first move on amendment or responding to a request it is in your business’ interests to be prepared.