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Groceries Code Adjudicator investigates Tesco

The Groceries Code Adjudicator has launched an investigation into Tesco's relations with suppliers.

GENERAL MERCHANDISE

Groceries Code Adjudicator investigates Tesco

The watchdog said it had taken the decision after considering information relating to practices associated with the retailer’s profit over-statement.

Adjudicator Christine Tacon said she had formed a “reasonable suspicion” that the Groceries Supply Code of Practice had been breached.

In a statement, the GCA 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.”

The GCA said the investigation will also consider the existence and extent of practices where suppliers have been required to make payments for shelf-positioning which are not related to a promotion.

Tacon added: “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.”

A Tesco spokesperson said: "We have worked closely with the office of the adjudicator since its creation to put in place strong compliance processes.

"An internal review we carried out and shared with the GCA identified some areas of concern.

"We have taken action to strengthen compliance and, as we have announced, we are changing the way we work with suppliers."  

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