MEP calls for probe into Tesco allegations

17 February 2010

17 February 2010 | Jake Kanter

Tesco must be investigated following claims it asked suppliers to pay up to €500,000 (£436,000) to have products stocked in its Irish stores, Labour MEP Alan Kelly has said.

The politician called on the European Commission and the Irish Competition Authority to probe allegations made by vendors in a report that appeared in the Irish Times this week.

Three Tesco suppliers told the newspaper that they were asked to pay a six-figure sum to have a presence in the supermarket’s 119 Irish stores.

Kelly said he had become increasingly concerned by the actions of large multinational firms. “It is clear that companies such as Tesco have little interest in Irish farmers, Irish food producers or Irish consumers,” he said.

“The incoming EU competition commissioner Joaquín Almunia has stated that consumers are at the heart of effective competition policy. Allegations like this are an example of the type of behaviour that reduces consumer choice by limiting the number of products available to Irish consumers.”

Following the allegations, Tesco put out a statement saying it would continue to pursue the lowest prices in all negotiations. These negotiations include the volume of business suppliers might secure for their products and investment they are prepared to make in marketing and promotion activity, it said.

“Tesco is the largest supporter of Irish food and drink products in the world, in both Irish and export markets. This support for Irish products and suppliers will continue into the future,” the statement added.

Meanwhile, in an interview with the Financial Times last week, Tesco CEO Sir Terry Leahy said he was not in favour of plans for a retail ombudsman to oversee vendor relationships.

"An ombudsman would be there to protect suppliers but should be there to protect consumers,” he said.

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