The Cooperative Whole Sale Establishment (CWE) outlets countrywide are struggling to keep its shelves adequately stocked with essential commodities as many of its suppliers have halted supplies due to non payment of their dues. Several essential suppliers told the Business Times that the management of the establishment is delaying their payments and they were not [...]

The Sunday Times Sri Lanka

CWE struggles to pay millions of rupee dues of suppliers

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The Cooperative Whole Sale Establishment (CWE) outlets countrywide are struggling to keep its shelves adequately stocked with essential commodities as many of its suppliers have halted supplies due to non payment of their dues.

Several essential suppliers told the Business Times that the management of the establishment is delaying their payments and they were not in a position to give long term credit for their supplies. As of today, CWE owes Unilever – Rs.408 million, Hemas – Rs.162 million, Fontera – Rs.60 million, Lanka Canneries – Rs. 43 million, Little Lion Associates – Rs.23 million, Dil Foods – Rs.48 million, Ruhunu Foods – Rs.32 million, Kotmale (Spice) – Rs.34 million, etc, official sources revealed.

Suppliers have offered the CWE 45 days credit and the payments were delayed for 60 to 70 days, they said. However they were not getting any payment since March, following the decision taken by the CWE Chairman Kiran Atapattu to close the central ware house in Colombo and direct all the supplies to be sent directly to outlets countrywide, a medium scale supplier who wished to remain anonymous told the Business Times.

All the major suppliers who didn’t have the infrastructure to handle direct deliveries to island-wide CWE outlets have failed to deliver the orders during the festive season, he said adding that it has created a shortage of products at the outlet level and sales were affected heavily.

Suppliers have stopped selling to the CWE owing to the payment delays. There are no stocks of potatoes, onions, salmon, soap, milk powder and other essential commodities at retail outlets countrywide. A medium scale commodity supplier said they have received only Rs. 2 million as a part payment last month and as of now their total balance outstanding with CWE was around Rs. 15 million. (March Sale – Rs.10.08 million and April – Rs.5.48 Million).

Currently the CWE is making payments to suppliers below Rs. 1 million every other week, he said adding that they cannot continue their business with the establishment as the out standing payments are mounting rapidly. The Treasury has recently turned down a request for a loan facility made by the CWE chairman for outstanding payments.

When contacted, Minister of Industry and Commerce Mr Rishad Bathiudeen said the Treasury has informed that it was the responsibility of the institution to maintain finances on its own, as the CWE is a public enterprise. He noted that the present financial issues could be settled soon and there was no intention, as reported, to hand over Sathosa to a leading supermarket chain.

All the outstanding payments for suppliers will be settled after the streamlining of management of the establishment, he added.
The minister said a new CWE outlet will be opened in Kattankudy in the Batticaloa district. CWE has a network of 250 outlets across the country and conduct business in solidarity with the Coop City and Mini Coop City shops of the Cooperative Societies island-wide, he pointed out.

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