The world largest soft drink company and Nigeria’s leading market leader in the soft drink segment, Coca-Cola Nigeria, has extended its payment circle for all its suppliers from 45 days to 120 days, 789marketing can authoritatively report.
789marketing investigations revealed that the new development affect the soft drink giant’s advertising agencies, experiential marketing agencies, public relations agencies, media independent agencies and other raw material and content suppliers in Nigeria.
Coca-Cola Nigeria, a multiple brands company harbours several integrated marketing communications agencies due to the nature of its business.
Prior to the new development, the soft drink company has had the most favourable payment circle compare to its contemporaries. But the new payment circle has moved the company to be among the highest in the category.
Agency owners and industry practitioners have at several fora advocated for a balmy payment regime that could be a win-win for client and agency.
However, basically, multinationals have continued to shift payment circle goal post year in year out to the detriment of agencies and suppliers.
According to an industry source, who pleaded anonymity, agencies in Nigeria are handicapped because client(s) know that once you walk away from the brief another agency is waiting on the corner to even ask for a more ridiculous payment circle.
Cadbury Nigeria, Unilever Nigeria, UAC, Nigerian Breweries and Guinness Nigeria among other multinationals have all made this a habit, the source said.
Another reliable source said, “Industry sectoral groups are mere social group. They lack power to implement a favourable payment circle particularly in the country that loan attracts double digits interest rate.”
“We have pleaded with the regulator and government to intervene to no avail. This practice is really crippling agency’s activities and dealing negatively on the bottomline, because as at the time you are paid, the entire fund will go back to the banks,” he revealed.
The new payment regime means that suppliers to Coca-Cola Nigeria and other companies with 120 days payment regime can only be paid 4 months after project completion and invoices sorted.