Premier Foods, one of the UK's biggest manufacturers, has been asking its suppliers for payments to continue doing business with the firm.
One supplier said the practice - known as pay and stay - was like "blackmail".
Newsnight understands the struggling company has received millions of pounds from its suppliers in this way.
Premier Foods said it was confident the scheme did not break any rules under competition law. The government said it was "concerned by recent reports".
The company, which owns brands like Mr Kipling, Ambrosia, Bisto and Oxo, demanded the payments from suppliers across the country.
Newsnight has seen a letter sent by chief executive Gavin Darby, dated 18 November.
'Nominated for de-list'
He wrote: "We are aiming to work with a smaller number of strategic suppliers in the future that can better support and invest in our growth ideas."
He added: "We will now require you to make an investment payment to support our growth.
"I understand that this approach may lead to some questions.
"However, it is important that we take the right steps now to support our future growth."
But when a supplier raised questions in an email about the annual payments, another member of Premier's staff replied.
"We are looking to obtain an investment payment from our entire supply base and unfortunately those who do not participate will be nominated for de-list."
One of the company's more than 1,000 suppliers, Bob Horsley, said he had been "taken aback" to receive the letter.
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