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Tesco facing probe into relationships and deals with suppliers

TescoTesco has fallen foul of regulators who are launching an investigation into whether it has breached a code with grocery suppliers.

The troubled supermarket chain is now subject to inquiries by the Groceries Code Adjudicator as well as the Serious Fraud Office and the Financial Reporting Council

GCA adjudicator, Christine Tacon, will investigate the retailer’s practices and said she had “reasonable suspicion” that it had delayed payments to its suppliers. She said she had her decision after “careful consideration”.

She said she had discussed various matters with Tesco

The inquiry will go back to June 2013 when the GCA was created and will investigate claims of duplicate invoicing and deductions not previously agreed.

The Adjudicator was set up to regulate the relationship between the 10 largest retailers and their suppliers and this is the first investigation to be held. It is expected to take up to nine months, and the Adjudicator has called for evidence to be submitted by 3 April.

Ms Tacon said: “This is the first investigation I have launched and it is a significant step for the GCA. I have taken this decision after careful consideration of all the information submitted to me so far.

“I have applied the GCA published prioritisation principles to each of the practices under consideration and have evidence that they were not isolated incidents, each involving a number of suppliers and significant sums of money.”

Business Secretary Vince Cable is encouraging anyone with any information of alleged wrongdoing to come forward. Their anonymity will be protected.

The GCA statement said:

The investigation will consider the existence and extent of practices which have resulted in delay in payments to suppliers. This will include in particular, but not be limited to, delay in payments associated with:

Short deliveries, including imposition of penalties

Consumer complaints where the amounts were not agreed

Invoicing discrepancies such as duplicate invoicing where two invoices were issued for the same product

Deductions for unknown or un-agreed items

Deductions for promotional fixed costs (gate fees) that were incorrect

Deductions in relation to historic promotions which had not been agreed.


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