Tesco is extending the time it takes to pay suppliers by 30 days in the run-up to the Christmas season.
The grocer has written to all its merchandisers to tell them it has changed its payment terms to 60 days from 30 days as of December 1st.
The Financial Times said it saw a letter from Tesco's finance director, Eamonn O'Hare, to suppliers that said the decision was the result of a "detailed review of our non-supplier [sic] terms, with the aim of improving consistency, transparency and efficiency across our non-food supply chain".
In a statement, Tesco said: "This is a move to align payment terms for our larger non-food suppliers across the Tesco group which currently vary from country to country and within product categories.
"We have written to suppliers to seek their agreement to the change and hope to implement it before the end of the year."
The move is part of a global review, the grocer added.
However, the newspaper has speculated Tesco planned the move to free up millions of pounds in capital that could be used to fund discounts over the crucial festive shopping period.
The decision is likely to anger suppliers, who will now have to wait longer to be paid by Tesco.
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