Thursday 27 October 2016

Tesco hit with 'fraud' claim in court row with Irish supplier

Company denies deliberately making it hard for supplier to work out what it was owed, writes Sarah McCabe

Published 24/04/2016 | 02:30

Beaumex is suing Tesco
Beaumex is suing Tesco

Retail giant Tesco Ireland says it "vigorously denies" allegations of fraudulent concealment made against it by a former Irish supplier.

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Beaumex, which supplied CDs and DVDs to Tesco Ireland, has accused the company of "concealment by fraud" for operating what Beaumex claims is an accounting system that made it impossible for the supplier to check how much it was actually owed.

Last week, in a contested hearing before the High Court, Beaumex claimed that a "very sophisticated" system operated by Tesco deliberately made it impossible for Beaumex to figure out whether it was being underpaid.

Senior Counsel Martin Hayden SC, for Beaumex, referred to a vast array of documents, spanning 52 lever arch files, supplied to it by Tesco, relating to sums allegedly owed to it.

"The defendant's accounting practices and accounts with regard to the plaintiff were such that the true amount due and owing to the plaintiff was 'concealed' and hidden from view" he said.

Tesco's approach was "systemic", Beaumex claims.

Tesco Ireland has said that the company "fully denies" all the claims made by Beaumex and will be vigorously challenging these.

Beaumex first lodged a case against Tesco in 2013, seeking €3.96m that it claims it is owed by the supermarket chain for goods supplied.

Beaumex said its new claim of fraudulent concealment predated, but was supported by, the recent findings of the UK Grocery Adjudicator, which was highly critical of how Tesco treated suppliers.

Christine Tacon, the UK's first Groceries Code Adjudicator, found multiple breaches of the UK Groceries Code, including delays in payments to suppliers and double-invoicing.

Senior Counsel Brian O'Moore, for Tesco Ireland, told the High Court last week that the paperwork referred to by Beaumex did not imply fraudulent concealment of itself and asked Beaumex to give more details to support its claim.

The case comes back before the High Court next month just as new Groceries Regulations come into force here.

Under the regulations, retailers and wholesalers with worldwide turnover of more than €50m - or who are part of a group of related companies with such a turnover - cannot change contracts unilaterally and must pay suppliers within 30 days.

Sunday Indo Business

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