Tesco to be investigated
The Groceries Code Adjudicator (GCA), which is set to be handed new powers to impose penalties on large retailers of up to one per cent of their annual UK turnover, has announced this week that supermarket giant Tesco is to be investigated over its relationships with suppliers following allegations of bullying and delayed payments. According to the organisation, it made the decision after considering information related to practices associated with Tesco’s first half profit over-statement.
Speaking in an interview this week, Adjudicator Christine Tacon said she has “reasonable suspicion” that the supermarket has breached the groceries’ code of practice in two areas and has urged suppliers to come forward and give evidence, assuring them that their anonymity would be protected. The GCA’s probe adds to investigations by the Serious Fraud Office and the Financial Reporting Council into Tesco’s accounting scandal, in which it overstated profit by £263m.
Forensic investigators will not only examine the financial records but also email trails and other communication between the supermarket’s buyers and their suppliers in a bid to find out whether the allegations can be substantiated or defended. The probe will take place over the next six to nine months and will cover the period between June 25 2013 and February 5 this year. Evidence must be submitted by April 3.
In reply to the announcement, a spokesman for the retailer said that Tesco has worked closely with the GCA since its creation and has taken action to strengthen compliance. It also carried out an internal review and shared some areas of concern with the watchdog.
Author: Roger Isaacs, 9 February 2015
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