Holland & Barrett exposed over supplier demands as "challenging" year faced

The retailer, which is owned by US private equity firm The Carlyle Group, is demanding a cut in costs of at least 5% from its suppliers, according to the letter seen by the BBC.

In the letter, Holland & Barrett warns that 2015 was challenging and 2016 will be “even more challenging”.

The retailer also reportedly wants suppliers to contribute to £3m worth of security tags and CCTV.

The Forum of Private Business branded it a “smash and grab raid” on the supply chain.

The forum’s managing director Ian Cass told the BBC: “I am surprised at the unwholesome attitude of Holland and Barrett.

“Many of their suppliers are small firms who have helped the retailer increase their margins and have been unable to put up prices themselves over the last few years.”

In a statement Holland & Barrett said: “We have made significant investments over recent years to drive the growth of the brand, including a major increase to both our UK and overseas store numbers and investments in both staff training and ecommerce technologies including click and collect.

“Naturally, suppliers benefit from the resultant increase in sales this growth brings, as well as customer and brand reach.

“This latest initiative is not the start of a negotiation process but a further part of this growth strategy which we are now in the process of communicating to our suppliers.”