National MP Chester Burrows says moves by Fonterra to delay and reduce payments to suppliers are putting additional pressure on rural companies already hurting from the dairy slump.
The MP for Whanganui told Radio NZ yesterday that Fonterra had requested 10 to 20 per cent reductions in charges from suppliers and up to three month delays in invoice payments.
"[Suppliers are] afraid to confront them too aggressively in case they lose business and the phone doesn't ring from Fonterra."
He said the co-op's tactics were "bloody scary" for firms already servicing an industry that was under pressure from low dairy prices.
Fonterra said the requests, which began in October, had been made to less than 20 per cent of its total number of suppliers.