Report slams Tesco’s bullying

Supermarket giant Tesco has come in for a stern ticking off over claims it bullied suppliers.

16-1-28-Tesco-634

An investigation by the Groceries Code Adjudicator (GCA), led by Christine Tacon, has found ample evidence that Tesco has mistreated its suppliers in order to bolster margins and profits. Among the practices cited in the 84-page report were delaying payments sometimes for years and arbitrarily deducting major sums from payments to meet targets. One supplier wrote off a debt because Tesco appeared to hint future businesses would be at risk if it was pursued.

What the commentators said

For instance, Tesco had failed to meet its own target for keeping them happy: an internal survey of suppliers had found that only 67% had said they were treated with respect. Still, "it's all a bit late", said Alistair Osborne in The Times. The GCA only gained the power to fine chains up to 1% of revenues after the Tesco enquiry was launched.

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But this may not be the end of the group's regulatory headaches, said Ben Marlow in The Daily Telegraph. There is a separate enquiry going on into Tesco's misreporting of earnings. The Serious Fraud Office can fine the company, and according to Cantor Fitzgerald's Mike Dennis, it could charge up to £500m and prosecute directors. Doubtful, said Osborne. Serious Fraud Office boss David Green's "record in nailing anyone" is little better than Christine Tacon's.

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