Following on from recent announcements concerned job losses at Tata Steel plants in the UK, the company has seemingly ruffled the feathers of its suppliers by demanding discounts or else.

According to a recent report by the BBC, Tata Steel wants its suppliers to cut prices by 30% or risk losing the steelmaker’s business.

Tata’s long products division has written to its suppliers requesting an immediate 10% discount on all purchases and claims it needs the support of its suppliers to transform the fortunes of the ailing business.

A consultation process between Tata Steel and its suppliers has been ongoing for some weeks. While some companies have been spoken to directly, others have received letters and the response has been both positive and innovative, according to Tata Steel.

But the news hasn’t been met with cheers from those on the receiving end. The Federation of Small Businesses wants Tata to treat its suppliers with the ‘utmost sensitivity’, arguing that small businesses rely upon the integrity of their bigger customers when it comes to honouring agreed contracts and paying on time.

John Allan, national chairman of the Federation of Small Businesses, says he is deeply concerned by the latest news from Tata Steel.