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Chain in serious breach of code

Tesco guilty of delaying payments to suppliers

Tesco advertisingTesco has been found guilty of failing to pay suppliers in an acceptable time period and of deliberately delaying payments.

The Groceries Code Adjudicator (GCA) said the supermarket giant was in serious breach of the legally-binding Groceries Supply Code of Practice.

It found Tesco had made unilateral deductions from suppliers, taken an unacceptable length of time to pay suppliers and in some cases intentionally delayed payments.

Andy Willox, Federation of Small Businesses’ Scottish policy convenor, said: “The issue of late payment plagues Scottish small firms. Today’s report into Tesco’s past treatment of its small suppliers lifts the lid on the UK’s late payment culture.

“For too long, larger firms have been free to abuse their relationship with smaller suppliers. Tesco has since apologised, and improved its terms. We need to see more company boards taking responsibility for their payment terms, and choosing to get behind their small suppliers no matter whether they’re based in Durham or Dundee.

“Today’s report underlines the important role the proposed Small Business Commissioner must play in redressing the power imbalance that led to the disgraceful tactics outlined in this report. We need to see wholesale culture change which can only come about through a full public inquiry.”

 The ruling on Tesco follows a new report from Bank of Scotland on the number of companies faced with unpaid invoices.

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