Tesco’s ‘scandalous situation’ provokes anger
A large number of people took to Twitter this morning (January 26) to voice their anger and frustration that Tesco had treated its suppliers unfairly and yet escaped a fine.
Some Twitter users vowed to boycott Tesco, while others said the retailer should be forced to compensate suppliers affected. See the Tweets below.
The investigation by the Groceries Code Adjudicator Christine Tacon has been applauded for revealing that Tesco, in some cases, deliberately delayed paying its suppliers.
‘Improve own financial position’
“I found that Tesco knowingly delayed paying money to suppliers in order to improve its own financial position,” Tacon said in her report published today (January 26).
View from government
“Christine Tacon has done a thorough and fearless investigation into a scandalous situation.”
- Anna Soubry, business minister
Tacon was also alarmed by two other key issues – the length of payment delays and Tesco’s unilateral deductions from supplier payments.
Business minister Anna Soubry said: “Christine Tacon has done a thorough and fearless investigation into a scandalous situation. Tesco say they have changed their practices and I very much hope they have.”
Tacon only received the power to fine retailers in 2015, which meant she was unable to impose fines in this case. Cantor Fitzgerald retail analyst Mike Dennis said: “My view on that is the horse has bolted there.”
Good news for SMEs
Meanwhile, IGF Invoice Finance md Tracy Ewen welcomed the GCA ruling as good news for small and medium-sized enterprises (SMEs) who did not have the power to confront Tesco in the past.
“For many in the supply chain, Tesco’s payment terms have been unsustainable due to delays in payments and unexpected changes in contract terms,” Ewen said.
“The GCA stepping in to censure Tesco over its behaviour is a step forward in helping small businesses tackle the constant stream of unfair payment terms coming from large corporations.”
The National Farmers Union president Meurig Raymond said: “I welcome Christine Tacon’s report signalling the fundamental change needed in Tesco’s handling of its direct suppliers.
‘Actions speak louder than words’
“Tesco has committed to act on these findings, but we’ve been here before; actions speaker louder than words.
“It is disturbing to read that Tesco has undermined the trust it had with its suppliers through widespread delays to payments in breach of the Groceries Supply Code of Practice.”
To read more about the ruling click here and to watch an apology by Tesco boss Dave Lewis click here.
What do you think should happen next? Take part our poll below the tweets at the bottom of this article.
I hate to say so, but the late payment of suppliers to boost its own practices is not limited to @tesco. It is std busines practice. #wato
— John Dalton (@JohnDalton6011) January 26, 2016
Oh #tesco are screwing suppliers over payments, what a surprise. #sarcastic duh
— Bronagh Duffy (@bronagh_duffy) January 26, 2016
#Tesco is far from the only company that bullies & defrauds its suppliers - department stores in the frame too
— Vendetta Associates (@Vendetta_Max) January 26, 2016
Tesco makes me so angry. Delaying paying suppliers £millions to make their finance reports look better. https://t.co/jtEfTNtcjU
— Emily Clark (@EmilyClark1702) January 26, 2016
Tesco knowingly delayed payments to suppliers < Time to consider shopping elsewhere... https://t.co/ha9MOEvBec
— Ross Savill (@RossSavill) January 26, 2016
how many business had to close layoff staff because Tesco knowingly delayed payments -tesco are cancer of retail sector in my view
— mark hilltops (@hellwelovespurs) January 26, 2016
The truth will out... "Tesco Knowingly delayed payments to suppliers" https://t.co/XSr01YDNDz#retail#competition@IFAmedia
— Richie Flynn (@TheRichieFlynn) January 26, 2016
If you shop at #tesco you are to blame too. Stop shopping there https://t.co/r1c241qs4V
— Francois Garcia (@croquetfgarcia) January 26, 2016
@ad_I_am@Tesco Every little does help. T helps everyone except Tesco's suppliers. They don't get help.
— Jimmy Hunter (@JimJamGin) January 26, 2016
I think that I will never shop at @Tesco. They come across as being a most disreputable retailer.
— Patrick T (@Pattmandhu) January 26, 2016
Survey
What should happen next?
Tesco should be made to pay a punitive fine
11%Tesco should pay a fine and compensate suppliers
76%Nothing: Tesco has admitted its mistake – it’s time to move on
11%Don’t know
2%
