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.”
What do you think should happen next? Take part our poll below the tweets at the bottom of this article.
What should happen next?
Tesco should be made to pay a punitive fine11%
Tesco should pay a fine and compensate suppliers76%
Nothing: Tesco has admitted its mistake – it’s time to move on11%