The Fraud Repression Agency (DGCCRF) recently launched 138 sanction procedures against companies that did not meet payment deadlines with their suppliers between January and May. This resulted in nearly 30 million euros in fines and pre-fines. Notable fines included Renault with 2 million euros, Ikea with 1.86 million euros, Arcelor Mittal with 1.5 million euros, Eurodisney with 1.3 million euros, and HSBC Continental Europe with 1.27 million euros.
The DGCCRF conducted the checks in 2023 according to the Directorate General for Competition, Consumer Affairs, and Fraud Control (DGCCRF). Non-compliance with payment deadlines can have adverse effects on a company’s competitiveness and profitability by weakening their cash flow. Out of the 248 companies checked, including four public ones, anomalies were found in almost one-third of cases. The total amount of delayed payments was reported to be over 14 million euros in fines and nearly 15.6 million euros in pre-fines.
Olivia Grégoire, Minister for Business, emphasized the need to strengthen sanctions against companies that fail to pay on time. She highlighted that late payments on large invoices can put a company at risk of insolvency or bankruptcy. She also pointed out that the total amount of delayed payments reached almost €15 billion last year alone. Large companies tend to pay their suppliers later despite having significant financial capacities, which exacerbates the problem of delayed payments for smaller businesses.
A payment deadline observatory revealed a drop in inter-company payment deadlines in 2022 for companies of all sizes but large corporations were found to be responsible for most of them.
The DGCCRF aims to address these issues through stricter enforcement measures to ensure timely payments from suppliers.
The agency has been cracking down on non-compliance since January by initiating sanction procedures against various companies that failed to pay their suppliers within agreed deadlines.
In conclusion, non-payment is a growing concern among businesses worldwide as it affects profitability and competitiveness by weakening cash flow management systems.
It is important for businesses to prioritize timely payments as it helps establish trust between buyers and sellers while ensuring fair business practices are maintained throughout the supply chain process.
