UK: Tesco “seriously breached” industry code, watchdog says

Supermarket Tesco “seriously breached” a legally-binding code to protect suppliers by prioritising its own finances rather than treating its suppliers fairly, the UK grocery watchdog said on Tuesday.

Following a review prompted by the company’s £326m accounting black hole, the Groceries Code Adjudicator Christine Tacon said Tesco will need to introduce significant changes to its practices and systems.

Tacon, whose investigation covered the period from June 2013 to February 2015, said she was concerned about three key issues: Tesco making unilateral deductions from suppliers, the length of time taken to pay money due to suppliers and in some cases an intentional delay in paying suppliers.

She said: “The length of the delays, their widespread nature and the range of Tesco’s unreasonable practices and behaviours towards suppliers concerned me. I was also troubled to see Tesco at times prioritising its own finances over treating suppliers fairly.”

Tacon’s recommendations include stopping Tesco from making unilateral deductions from money owed for goods supplied. Suppliers will be given 30 days to challenge any proposed deduction and if challenged Tesco will not be entitled to make the deduction.

In addition, the company will need to correct pricing errors within seven days of notification by a supplier and improve its invoices by providing more transparency and clarity to suppliers.

Full content: The Guardian

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