Tesco investigated by new regulator
5 February 2015 Last updated at 07:45 Share this pageEmailPrint
Tesco is to face another investigation into its relations with suppliers, amid concerns that it breached the Groceries Supply Code of Practice.
The Groceries Code Adjudicator (GCA) joins the Serious Fraud Office and the Financial Reporting Council in investigating the supermarket chain.
The GCA’s adjudicator, Christine Tacon, said she had “reasonable suspicion” that the code had been breached.
The GCA will look into Tesco’s profits and delays in payments to suppliers.
The investigation is expected to take up to nine months.
The GCA is set to be handed new powers to impose penalties on large retailers of up to 1% of their annual UK turnover.
In a statement, Business Secretary Vince Cable said: “Last week I secured the final agreement in government to proceed with legislation to enable the regulator to impose hefty fines for those supermarkets found guilty of mistreating suppliers.”
But Ms Tacon told the BBC that she could not fine Tesco, as any offences she was looking at would have been committed before she was given the power to do so.
Mr Cable said: “This is an historic day for the groceries code adjudicator and shows we have created a regulator that has real teeth.
I have also agreed an increase of almost 40% in the adjudicator’s funding for the coming year, so that it can carry out more of its important work.
Now that a formal investigation has been launched, I would encourage anyone with any evidence of wrongdoing to come forward and to be confident of being able to do so confidentially, as their anonymity will be protected by law.”
Ms Tacon said: “This is the first investigation I have launched and it is a significant step for the GCA.
“I have applied the GCA published prioritisation principles to each of the practices under consideration and have evidence that they were not isolated incidents, each involving a number of suppliers and significant sums of money.”
Ms Tacon has called for evidence to be submitted by 3 April.