Tesco comes under investigation by UK's new supermarket watchdog
The accounting scandal at Tesco has taken another turn after the new supermarket watchdog said it would open an investigation into the retailer's treatment of suppliers.
In its first formal investigation since launching in 2013, the Groceries Code Adjudicator (GCA) said it had "reasonable suspicion" that Tesco had breached the UK industry's code of practice. The code covers a number of measures relating to how suppliers are paid.
The investigation into Tesco will probe allegations that it delayed payments to suppliers and demanded payments from businesses for more prominent positioning of their products within stores.
Tesco became embroiled in an accounting scandal last September after new boss Dave Lewis uncovered irregularities into how it booked revenues relating to deals from suppliers. Tesco eventually announced it had a £263m shortfall in its profits.
The GCA said it had launched the investigation after receiving information "relating to practices associated with the profit over-statement announced by the retailer".
Phil Orford, chief executive of the Forum of Private Business, which represents Tesco suppliers, said: "This is yet another example of the supply chain abuse that threatens to break the backbone of the British economy - small businesses."
The GCA does not yet have the power to fine companies, but it can name and shame businesses found to be in breach of the code and issue recommendations to guilty parties.
Christine Tacon, the adjudicator, said the launch of the body's first investigation was a "significant step".
She said: "I have taken this decision after careful consideration of all the information."