Tesco admits 'probable' breaches of groceries code in its treatment of suppliers

Will Green is news editor of Supply Management
10 June 2015

Tesco has admitted there have been “probable” breaches of the groceries supply code of practice (GSCOP) in its dealings with suppliers.

The supermarket is currently under investigation by groceries code adjudicator Christine Tacon after she announced in February that she “holds a reasonable suspicion that the code has been breached by Tesco”.

In its annual report Tesco said: “Regrettably, we have concluded that there have been a number of instances of probable breaches of the code which fall short of the high standards we expect to uphold in our dealings with our suppliers.

“We are taking effective action to prevent this arising again. We are fundamentally changing the way we work with our suppliers to deliver a more sustainable and collaborative business model for everyone in the supply chain.”

In the report Tesco said it had written down profits by £208 million due to the overstatement of "commercial income", which includes payments from suppliers for achieving sales volumes or to cover costs incurred for “unplanned variations in product specification”.

A spokeswoman for Tesco said: “The annual report repeats what we said in February, which is that following our announcement last September regarding commercial income, we worked with the adjudicator to identify any relevant GSCOP issues.

“An internal review which we shared with the adjudicator identified some areas of concern. We have taken action to strengthen compliance and, as we have announced, we are changing the way we work with our suppliers.”

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