Payment regulation for wholesale and retail business

METRO is following with great concern that the European Commission adopted a stricter than anticipated measure as part of the SME relief package; namely new Late Payments Regulation setting 30 days strict payment terms in business-to-business transactions.

According to our internal estimations, there is an immense potential negative liquidity effect of the proposal on METRO, since we have agreed payment terms with our suppliers which are exceeding the 30 days especially for non-food items, allowing us to spread the payments over time.

We call on the European Parliament and national governments to engage with retailers and wholesalers to better understand the far-tanging risks that the proposal contains. It is important that the freedom of contract and negotiation remain preserved. At the same time, the economic consequences and their repercussions must be considered carefully and balanced against the actual objective of the regulation. Restricting payment terms to 30 days to address late payments is in our view the wrong way of dealing with the issue of late payments.

Read METRO’s position in detail in our paper.