TESCO News: Tesco investigated by new regulator
Tesco is to face another investigation into its relations with suppliers, amid concerns that it breached the Groceries Supply Code of Practice. The Groceries Code Adjudicator (GCA) joins the Serious Fraud Office and the Financial Reporting Council in investigating the supermarket chain.
The adjudicator, Christine Tacon, said she had "reasonable suspicion" that the code had been breached. However, the GCA will not be able to fine Tesco for past offences.
In a statement, Business Secretary Vince Cable said: "Last week I secured the final agreement in government to proceed with legislation to enable the regulator to impose hefty fines for those supermarkets found guilty of mistreating suppliers."
These penalties on large retailers could total up to 1% of their annual UK turnover.
But Ms Tacon told the BBC that despite this legislation, she could not force Tesco to pay a penalty, because the offences would have been committed before she was given the power to impose fines.
Source: BBC News 5 February 2015
Tesco under investigation by new regulator over dealings with suppliers
Groceries code adjudicator has ‘reasonable suspicion’ that supermarket
has breached groceries code of practice
by Matthew Weaver and agencies
The GCA’s probe adds to investigations by Britain’s Serious Fraud Office and the Financial Reporting Council into Tesco’s accounting scandal, in which it overstated profit by £263m.
A 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.”
A Tesco spokesman said: “We have worked closely with the office of the Adjudicator since its creation to put in place strong compliance processes.
“Following our announcement last September regarding commercial income, we have worked with her to identify any relevant GSCOP issues. 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. We will continue to co-operate fully with the GCA as she carries out her investigation and welcome the opportunity for our suppliers to provide direct feedback.”
Business secretary Vince Cable said: “This is an historic day for the groceries code adjudicator and shows we have created a regulator that has real teeth.
“Last week I secured the final agreement in government to proceed with legislation to enable the regulator to impose hefty fines for those supermarkets found guilty of mistreating suppliers.”
Source: The Guardian 5 February 2015