Britain's Premier Foods backs down in suppliers row

LONDON, Dec 7 (Reuters) - Premier Foods (LSE: PFD.L - news) , the British maker of Mr Kipling cakes and Bisto gravy, has backed down in a row over suppliers having to make cash payments to retain contracts, saying it would make changes to its policy.

The company said on Sunday that payments sought as part of its Invest for Growth programme were effectively one of the various types of discounts companies commonly seek to negotiate with suppliers but that it would simplify arrangements after criticism from politicians and business groups last week.

"Over the last few days it has become apparent that this mechanism has been widely misunderstood and misinterpreted," Chief Executive Gavin Darby said in a statement.

"In this situation we are fully prepared to simplify the details of our future programme to a more conventional type of discount negotiation ... The most important aspect for us is that we continue to develop strategic supplier partnerships that are focused on delivering mutual growth."

(Reporting by James Davey; Editing by David Goodman)