An offer you can't refuse

"It's like a gun held to your head."

Premier Foods, one of the UK's biggest manufacturers which owns brands like Mr Kipling, Ambrosia, Bisto and Oxo, demanded payments from suppliers across the country. has been demanding its suppliers for payments to continue doing business with the firm. Businesses are scared to speak out for fear of losing their contracts.

Horsley, who has had a maintenance contract with Ambrosia in Devon for more than 10 years, said: "I think it's like blackmail. What they are saying is 'unless you pay this money, you can't do the work'."

Another businessman said Premier had previously asked for more than £70,000. "They know you can't afford solicitors to fight them. I'd never pay anyone for work."

Liesl Smith, from the Federation of Small Businesses, said: "This is the first time that we have ever seen anything so blatant... in this very direct way before. We think it is unjust, it is not competitive and it is not helping the supply chain. Premier Foods certainly don't value their suppliers, it's crippling small businesses. It's not just going to affect the business owners, it will affect staff as well."