Four in 100 of Tesco’s direct suppliers, who responded to a questionnaire by the grocery regulator, said the UK’s biggest supermarket never complied with the code of practice, which governs major retailers’ dealings with suppliers. A further 30 per cent said the supermarket rarely complied with the code.
Tesco’s poor rating comes despite the attempts of its chief executive, Dave Lewis, to change behaviour at the group after its £263m supplier payments accounting scandal, The Guardian reports.
That scandal prompted the grocery code adjudicator, Christine Tacon, to investigate Tesco’s treatment of suppliers. On Monday, Tacon said her inquiry was unlikely to be completed until the autumn.
Tacon declined to comment on the details of her investigation, but said she welcomed the changes Lewis was making to Tesco dealings with suppliers. Lewis is cutting the ways in which it charges suppliers from 24 to three, putting more focus on agreeing a suitable price upfront.
“I think that will lead to more compliant [dealings],” she said, adding that every major retailer had made changes to the way they dealt with suppliers in the wake of Tesco’s issues.
Tesco said the survey, which covered just over 1,000 manufacturers in total, was a snapshot of its business partners’ views, given that the supermarket has 3,000 UK suppliers. Tesco said the survey also showed progress from last year, when 6% of those taking part said the retailer never complied with the code and 35 per cent said it rarely did.
“Suppliers are at the heart of our business and we’ve been working collaboratively with them to change the way in which we work. Since 2013, we have taken action to strengthen our compliance processes and have established a dedicated supplier helpline in the UK,” the retailer said in a statement.
Tacon, who was installed two years ago to oversee the grocery code which had been in place since 2010 without bringing about much change in the industry, said she believed retailers were now changing their ways.
“Genuinely, people have become more aware of what they can and can’t do,” she said.
