Kellanova, the owner of a US cereal brand, warns that the proposed 30-day payment rule in the EU could harm competitiveness with other countries outside the bloc.
Dave Lawlor, the regional president for Europe of the company, expressed concerns to Minister of State Dara Calleary about the negative impact a standard 30-day payment rule could have on the business environment.
He highlighted that such a rule could reduce the competitiveness of food manufacturers within the EU compared to those outside, including in the UK.
The European Commission’s proposal to change the late payment directive into a regulation aims to address the issue of small and medium-sized enterprises facing bankruptcy due to delayed payments.
The current directive allows for a 30-day payment term, but the ambiguity in interpretation has led to longer terms being imposed on smaller creditors, impacting their financial stability.
Kellanova’s concerns stem from the potential impact of the 30-day rule on their business operations, especially concerning the extended time gaps between purchasing raw materials and receiving payments for finished products.
They argue that a one-size-fits-all approach to payment terms could increase debt burdens and harm the competitiveness of food manufacturers in the EU compared to those outside the bloc.
In addition to their concerns, Kellanova shared a submission from Ibec, a business representative group, highlighting the potential drawbacks of turning the Late Payment Directive into an EU Regulation.
