PPMA 2014

Millions of pounds in fines for supermarkets: Tacon

By Nicholas Robinson

- Last updated on GMT

Tacon is pushing for fines of millions of pounds
Tacon is pushing for fines of millions of pounds

Related tags Groceries code adjudicator Supermarket

Fines of hundreds of millions of pounds could be imposed on retailers if they are found to be in breach of the Groceries Supply Code of Practice (GSCOP).

Christine Tacon, the Groceries Code Adjudicator (GCA), said she had recently recommended that Parliament give her the power to fine retailers millions of pounds if they breached the GSCOP.

Tacon made the announcement minutes after she had asked Tesco to examine its behaviour​ towards suppliers during its upcoming internal review, after it overstated its half-year profits by £250M.

“I have some tough powers that I can use and I want to make that clear,” ​she told delegates at a Processing and Packaging Machinery Association (PPMA) seminar at the Birmingham National Exhibition Centre yesterday (September 30).

Fraud investigations

Her investigations into breaches of the GSCOP would be as detailed as fraud investigations, Tacon warned.

“I do have power and I do have significant sanctions that I can use. At the most basic level, I can issue a recommendation or I can name and shame.

“But, most importantly, I can fine the retailers and the maximum level hasn’t come back from Parliament yet, but I have recommended that they can be hundreds of millions of pounds on the most serious occasions,” ​she said.

However, Tacon remained worried that too few suppliers had come forward with information about unfair practices from retailers.

“I have a head of investigations who is an ex-policeman and is ready to start,” ​she said.

But, without hard evidence, her role would likely become redundant, she cautioned.

“If I don’t get those investigations, then I won’t be here for long because my office will be closed down.”

Tacon reinforced her plea for suppliers who had been treated unfairly by retailers to come forward, “they will be treated confidentially”, ​she promised.

Supermarkets were worried

Supermarkets were worried that suppliers would come to her with complaints about unfair practices, as there were many ongoing breaches to the code, claimed Tacon.

“There will be somebody within a company that is going to have sleepless nights ​[if I find one breaking the code],” she warned.

“The code is law and a retailer is required to have a code compliance officer who is not allowed to be involved in the supply chain."

Meanwhile, problems with a lack of information from suppliers were also highlighted by Tacon in a recent article written exclusively​ for FoodManufacture.co.uk.

Almost 80% of direct suppliers who responded to a YouGov poll about the GCA had experienced an issue covered by the GSCOP, she said in the article.

Yet, more than half of direct suppliers said they were unsure whether or not they would raise a direct issue with the GCA.

“There is still a reluctance to bring evidence to me and to talk openly and specifically, rather than anecdotally of potential breaches,” ​she added.  

Today (October 1), the Financial Conduct Authority has launched an official investigation to find out how Tesco came to inflate its profits guidance.

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