Saturday 22 October 2016

UK probe into Tesco over suppliers code claims to be published in January

Josie Clarke, Press Association Consumer Affairs Correspondent

Published 28/12/2015 | 12:58

UK probe into Tesco over suppliers code claims to be published in January
UK probe into Tesco over suppliers code claims to be published in January

An investigation into Tesco's relationships with suppliers is now due to be published towards the end of January, almost a year after the regulator said it had "reasonable suspicion" that the supermarket giant had breached the Groceries Supply Code of Practice.

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Britain's Groceries Code Adjudicator previously said its inquiry, which began in early February, would be completed within six to nine months "and certainly by the end of this year". It had an April deadline for taking evidence.

Christine Tacon, the adjudicator, said in a newsletter to industry in November that the investigation was "now in the final stages" but had taken slightly longer than the nine months she had anticipated.

It is understood the report will be made public towards the end of January.

In February, Ms Tacon said she had formed a "reasonable suspicion" that the retailer had breached the Groceries Supply Code of Practice.

She took the decision after considering information submitted to her about practices associated with the profit over-statement announced by Tesco last year.

The company said in September 2014 that it had overstated profits by £250 million, which led to the Financial Conduct Authority launching a probe.

Tesco said then that it had already changed the way it worked with suppliers.

Ms Tacon said at the time of the announcement that she had held discussions with Tesco and needed more information from direct suppliers and others to determine what further action to take.

The role of the adjudicator was set up in 2013 to regulate the relationship between the 10 largest retailers and their suppliers.

The investigation has covered the conduct of Tesco going back to June 2013 and has focused on payment delays and payments for better positioning of goods unless in relation to promotions.

The adjudicator, who cannot impose a fine, said she would guarantee the anonymity of any suppliers.

In June, a report revealed that almost one in five suppliers to the country's biggest supermarkets would not raise any issues with an independent adjudicator, mainly because they fear retribution.

A survey of 1,000 suppliers showed other reasons included not being confident that a complaint would remain confidential, or not being sure anything would be done.

Ms Tacon released the findings at the second annual conference of the organisation.

The number of suppliers reporting Grocery Code issues in their dealings with the 10 biggest retailers in the past year was 70%, down by 9% over the previous 12 months.

Issues included delays in payments, unjustified charges for consumer complaints and an obligation to contribute to marketing costs.

The survey also showed that 54% of those who raised issues with the adjudicator in the last year concerned Tesco, compared with 26% about Morrisons, 15% about Asda, 14% about the Co-op, 13% about Sainsbury's, 5% about Iceland, 1% about Marks & Spencer, Waitrose and Lidl, while none concerned Aldi.

The proportion of suppliers saying they would consider raising an issue with the adjudicator increased by 9% to 47% over the past year.

Press Association

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