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Tesco Late Payments in Breach of Groceries Code

January 26 2016

Tesco withheld payments from suppliers by up to two years the Supermarket Ombudsman has found, after an investigation that began in February 2015 published its results today.

The Grocery Code Adjudicator, Christine Tacon, said that the supermarket had seriously breached the industry’s code of conduct and had knowingly delayed payments to suppliers in order to improve its own financial position.

The investigation found that even when a debt to a supplier had been acknowledged, Tesco sometimes took more than 12 months to pay and on a number of occasions took more than two years to settle the debt.

According to Ms Tacon, "The delay in payments had a financial impact on suppliers, was an administrative burden to resolve, detracted from the time available to develop customer focussed business and had a detrimental impact on some suppliers' relationships with Tesco."

This is the first investigation since the creation of the role of the Grocery Code Adjudicator, but Tesco cannot be fined as this power was only granted to the ombudsman after the investigation was started.

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