ISME, the small and medium sized enterprises association, has claimed that state agencies are blackmailing Irish businesses over their contracts with the Government.
The association says that Government agencies are writing to their smaller suppliers demanding reductions of 8% and more on their existing contracts.
It says the letters imply that any firm who refuses to comply will be blacklisted and no longer allowed supply the state agencies.
'This is a total abuse of a dominant position and a frontal attack on the SME sector through blatant disregard for contractual legalities, not to mention fair play,' commented ISME CEO Mark Fielding.
'The 'put up or shut up' attitude is putting undue pressure on smaller suppliers, who are already having to content with late payments from the state,' he added.
He says that ISME is calling on the Government to instruct state departments to honour all existing contracts at the prices originally agreed.
