British food firm Premier Foods has agreed to reconsider its controversial scheme of receiving payments from suppliers in return for contracts.
The company faced severe criticism after a report revealed that it had received millions of pounds from this practice known as 'pay and stay', BBC reported.
Following this, UK's business secretary Vince Cable had demanded the Competition and Markets Authority (CMA) to investigate the issue.
The company said the arrangement had been "misunderstood and misinterpreted" and it would now go back to a more "conventional" scheme, the news agency revealed.
However, the firm will still seek discounts from suppliers, but will not go for upfront payments for the business.
Premier Foods CEO Gavin Darby was quoted by BBC as saying: "Over the last few days it has become apparent that this mechanism has been widely misunderstood and misinterpreted.
"In this situation, we are fully prepared to simplify the details of our future programme to a more conventional type of discount negotiation, potentially based on price, value or volume based rebates, or lump sums."
Premier Foods owns brands such as Mr Kipling, Ambrosia, Bisto and Oxo.
