It almost seems that each new week brings more bad news for beleaguered supermarket giant Tesco, with the Groceries Code Adjudicator (GCA) announcing that it will investigate the supermarket over its relationship with suppliers.
The Adjudicator Christine Tacon said the decision to investigate Tesco plc came after considering information submitted to her relating to practices associated with the profit over-statement announced by the retailer in September 2014.
The GCA has asked for more information from direct suppliers and others, and while the overall investigation is expected to take 6-9 months, the Adjudicator has called for evidence to be submitted by 3 April 2015. Specifically the investigation will cover the conduct of Tesco plc from 25 June 2013 (when the GCA was created) to 5 February 2015.
Complaints particularly relate to delayed payment and the payment for better positioning of goods in store. This includes, but is not limited to: Short deliveries, including imposition of penalties; Consumer complaints where the amounts were not agreed; invoicing discrepancies; Deductions for unknown or un-agreed items; Deductions for promotional fixed costs (gate fees) that were incorrect and Deductions in relation to historic promotions which had not been agreed.
Christine Tacon said: “This is the first investigation I have launched and it is a significant step for the GCA. 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.”
However, some retail analysts have expressed scepticism over the investigation. “[This] feels very much like self-justification by an organisation that has talked much, but not actually done anything of note,” Clive Black, an analyst at Shore Capital, told European Supermarket Magazine . “We would be surprised to see a material fine.”