CIPS welcomes inquiry into Tesco supplier treatment but says 'action is long past its sell-by date'

Will Green is news editor of Supply Management
5 February 2015

CIPS has welcomed an investigation into Tesco’s treatment of its suppliers by the grocery regulator but said such action is “long past its sell-by date”.

David Noble, group CEO, CIPS, said if wrongdoing by Tesco is uncovered “the regulator must have the teeth to force change” as “for too long the retail sector has felt able to operate according to its own norms and practices without regard for best practice”.

Noble spoke out after Christine Tacon, the groceries code adjudicator, announced an inquiry into Tesco after “forming a suspicion” the supermarket had breached the Groceries Supply Code of Practice. The investigation will focus on issues around payments for better shelf positioning and delayed payments.

“We welcome the GCA’s investigation but firm action on late payment is long past its sell-by date,” said Noble.

“Unchecked retailers have felt free to abuse their power for far too long and suppliers across the UK are owed billions of pounds in unpaid invoices.

“If there has indeed been wrongdoing by Tesco, the regulator must have the teeth to force change. But this remedial action is tantamount to closing the stable door once the horse has bolted.

“For too long the retail sector has felt able to operate according to its own norms and practices without regard for best practice in procurement and supply chain management. To really sort out this mess at source, there needs to be clear accountability and higher standards within the retail procurement industry as a whole.”

Noble said it was time to “change course” and ensure staff were qualified to manage supply chains.

“Regulatory action or no, if the UK’s retail supply chains are run without the right people in place and for the sole purpose of reducing costs and squeezing suppliers, it will only be a matter of time until the next scandal comes to light,” he said. “We must take this opportunity to change course now.

“How many more scandals will it take for us to realise that the solution is to have qualified and competent professionals managing supply chains? At CIPS we will continue to call for increased professionalism, accountability and responsibility. Enough is enough.”

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