“There is political and regulatory restraint in terms of what the GCA can do,” Duncan Swift, partner and head of the food advisory group at accountancy firm Moore Stephens told FoodManufacture.co.uk.
Funding would be a major problem, he claimed. Until recently, Tacon’s annual budget had been £800,000. “Vince Cable [business secretary] has increased her budget by 40%. That’s about £300,000. I don’t see that going very far in an investigation of this nature.”
He called the increase a “sticking plaster” measure to cover the considerable limitations of her office.
For example, it had emerged that her investigation could only cover the period from January 21 2013, when she was appointed, said Swift. If Tesco were to have engaged in questionable practices with suppliers, they would probably have predated that time, he said.
He claimed her remit should at least extend to February 2010, when the Groceries Supply Code of Practice (GSCOP), which steered the top 10 supermarkets’ dealings with suppliers, was set up.
Swift’s comments come amid fresh allegations of market misbehaviour by Tesco. Reports surfaced in The Sunday Times yesterday (February 8) that the UK’s biggest grocery retailer had emailed suppliers, requesting they cut their prices by up to 10% or face delisting.
Last week, business secretary Vince Cable announced that measures were being introduced in parliament to allow Tacon to fine retailers up to 1% of their turnover for breaching the GSCOP.
However, it emerged that she would not be able to impose financial penalties for infringements that occurred before that power was activated.
‘Stable. Horse. Bolted’
Swift said: “Stable. Horse. Bolted. The Department for Business, Innovation & Skills [BIS] has had over five years to prepare for its first investigation and these limitations on scope and ability to penalise suggest BIS never really expected an adjudicator investigation to ever be launched.”
However, he welcomed the fact that Tacon’s scrutiny of Tesco ensured her role would continue for the foreseeable future.
Meanwhile, Tacon’s investigation could well be informed by a major annual survey of the UK’s 8,000 supermarket suppliers due to be undertaken in April.
Tacon hit the headlines last week when she launched an investigation into Tesco’s relationship with its suppliers following evidence from a review by accountancy firm Deloitte, an internal Tesco probe and supplier feedback.
Tacon has invited suppliers to contact her confidentially by April 5 with details of anything of relevance to the probe, which she estimated could take six to nine months. She claimed other supermarkets could be included in its scope if further evidence emerged.
Suppliers wishing to contact Tacon with evidence of mistreatment by the major supermarkets should click here.