McCain UK hits back as suppliers' cover is frozen
McCain’s UK division has hit back at Euler Hermes for prematurely withdrawing cover which insured suppliers against the threat of the frozen food giant going insolvent
Experts believe the insurer’s decision also has far reaching implications for
the traditional accounts submission process for public companies.
Earlier this month,
Euler Hermes
refused to provide trade credit insurance to some of
McCain’s suppliers until
it had seen more up-to-date numbers, despite the company being on schedule to
submit its latest set of accounts to June 2008 on time.
McCain said: ‘McCain Foods has worked with many of its suppliers for a number
of years some for over three generations and has an exemplary record of the
settlement of bills, and this remains the case.
‘We submitted our GB accounts to Companies House for processing on 21 April
in line with our statutory requirements.
‘Euler Hermes is just one of several credit insurance providers that are used
by our suppliers and we remain disappointed that they could not wait just two
weeks.’
Martin Williams, of credit referencing agency Graydon, said: ‘There’s not
even a suggestion McCain UK is in trouble but, in this market, jittery investors
and suppliers may think “does the credit insurer know something we don’t?”
‘Credit insurers are asking for more and more monthly management account
information, and not relying on filings at Companies House.
‘There’s a serious issue for public companies if they have to issue
management accounts before they’ve updated their shareholders through statutory
filings.’
Euler Hermes said: ‘In the current climate we are asking buyers to disclose
far more information and to be far more transparent than a year ago.
‘Whereas, in the past, we may have given them the benefit of the doubt, today
Euler Hermes will need to be convinced that the company will weather the storm.’
As the issue continued to unfold, the Association of British Insurers issued
a statement of principles setting out how trade credit insurers operate and what
their clients can expect from them.
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The statements include a commitment to provide, on request, reasons for a
decision to stop or substantially reduce credit insurance cover and to swiftly
resolve appeals against decisions.
