Holland and Barrett is being accused of squeezing small businesses after it sent a letter to suppliers demanding contributions to its investment plan.
In a letter this month, seen by the BBC, the high street retailer says it wants a reduction of costs of at least 5% from all its suppliers.
It also wants suppliers to pay for £3m worth of security tags and CCTV.
The Forum of Private Business has described it as a ‘smash and grab raid’ on the supply chain.
‘I am surprised at the unwholesome attitude of Holland and Barrett,’ said Ian Cass, Managing Director of the FPB.
‘Many of their suppliers are small firms who have helped the retailer increase their margins and have been unable to put up prices themselves over the last few years.’
‘Sometimes it is helpful to suppliers to offer discounts to retailers in return for product placement or increased marketing of their products, which is beneficial to both parties, but this needs to be agreed by both sides, not a unilateral decision as in this case.’