Northern Foods squeezes its suppliers

Ready meal giant Northern Foods is reported to be forcing a five per cent price cut onto its suppliers.

The move, part of a shake-up of the business by chief executive Pat O’Driscoll, saw letters sent to suppliers telling them the company would be dropping the prices it pays for goods and services after May 31.

According to reports in the press, the letter stated: “Accepting new orders from Northern Foods on or after June 1 will signify acceptance of these changes, which we expect our suppliers to comply with.

“For you as a current supplier to Northern Foods we believe that this sourcing review provides a significant opportunity to increase your share of our business.”

The company said the price cut was the result of cost pressures from its own customers and was aimed at meeting O’Driscoll’s aim to increase profit margins by one per cent.