U.K.: Tesco investigated by new regulator
Christine Tacon, the adjudicator, took the decision after considering information submitted to her relating to practises associated with the profit over-statement Tesco announced last September.
Today's (Feb. 5) announcement from the GCA says Tacon has discussed the practises with Tesco and now needs more information from direct suppliers and others before considering the next move.
The investigation is expected to continue over the next six to nine months and the Adjudicator has called for evidence to be submitted by April 3, 2015.
The enquiry will cover Tesco plc conduct from June 25 2013 to February 5 2015 and possible breaches of the code include payments for better positioning of goods outside of agreed promotions and the existence and extent of practises resulting in delayed payments to suppliers.
"This will include in particular, but not limited to, delay in payments associated with 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," says a GCA release.
At this stage the investigation will only focus on Tesco plc and not extend to other retailers.
However, if during enquiries evidence is presented to the GCA indicating similar practises being carried out at other retailers, the probe could be extended.
"This is the first investigation I have launched and it is a significant step for GCA," Tacon says in the release.
"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."
The GCA is the UK’s first independent adjudicator to oversee the relationship between supermarkets and their suppliers. It ensures that large supermarkets treat their direct suppliers lawfully and fairly, investigates complaints and arbitrates in disputes.
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