J Sainsbury has postponed imposing new invoice terms on some suppliers until a dispute over the new payment regime can be resolved, the Office of Fair Trading said yesterday.
As Justin King, chief executive of the country's thirdlargest grocer, cuts prices to win back customers who defected to market leaders Tesco and Asda, the company has been exerting pressure on suppliers to take some pain.
Sainsbury wrote to 1,900 of its 8,000 suppliers on January 6 to tell them they would be put onto "standard" terms, which means an average payment time of 49 days - an invoice raised in one month is paid at the end of the following month.
For some, this could mean a longer wait for payment, and industry bodies like the Fresh Produce Consortium and the National Farmers' Union raised the matter with the OFT. The competition watchdog said Sainsbury had agreed to delay the new regime until the differences are ironed out.
Under the Supermarket Code, which binds all of the major UK food sellers, if a dispute with suppliers can't be resolved, the supermarket appoints and pays for an independent mediator.
A spokeswoman for Sainsbury said only 150 of the 1,900 suppliers it had originally written to were in dispute over the terms and had consequently been offered a delay in the implementation of the new regime.
"We are trying to come to an amicable arrangement with them, but if we can't we'll go to independent arbitration," she said.
Last year, the OFT commissioned an independent audit of the supermarkets' compliance with the Code, which will be published within the next few weeks.