Investigation launched into Tesco's supplier practices
After months and months of serious trouble, an official investigation is going to be launched which will look into Tesco's practices and relationship with suppliers. Looks like they've been late paying the people who provide them with stock, among the myriad of other things they've been up to.
The Groceries Code Adjudicator (GCA), Christine Tacon, said she's got a "reasonable suspicion" that Tesco have breached supply guidelines, adding that she took the decision to launch an investigation after looking at information that was submitted to her.
Now, Tacon will talk with direct suppliers to see what further action needs to be taken. The investigation will take 9 months, which means Tesco's woes are going to pile up throughout 2015. Evidence from suppliers will need to be submitted by April 3rd.
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."
In addition to this, there's going to be scrutiny over Tesco whether or not Tesco asked suppliers for money to ensure better positioning for goods on their shelves.
All-in-all, Tesco are having a woeful time of it, and as well as dealing with all this, they're closing down a lot of stores in a bid to get back on track.
Tacon added: "I have taken this decision after careful consideration of all the information submitted to me so far. I have applied the GCA published prioritisation principles to each of the practices under consideration and have evidence that they were not isolated incidents, each involving a number of suppliers and significant sums of money."
A Tesco spokesman said: "We have taken action to strengthen compliance and... 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."
With the Serious Fraud Office sniffing around too, Tesco's troubles aren't over by a long shot.