Tesco enquired about late payments to suppliers

The issue arose when the supermarket watchdog looked at information gathered during the profit over-statement. Christine Tacon, the UKs Groceries Code Adjudicator (GCA), will now start speaking to suppliers to see what action needs to be taken.

The investigation, the first to be held, is expected to take up to nine months and the Adjudicator has called for evidence to be submitted by April 3, 2015.

A statement said: “The investigation will consider the existence and extent of practices which have resulted in delay in payments to suppliers. This will include in particular, but not be limited to, delay in payments associated with: short deliveries, including imposition of penalties; consumer complaints where the amounts were not agreed; invoicing discrepancies such as duplicate invoicing where two invoices were issued for the same product; deductions for unknown or un-agreed items; deductions for promotional fixed costs (gate fees) that were incorrect; and deductions in relation to historic promotions which had not been agreed.”

The investigation will also consider the existence and extent of practices where suppliers have been required to make payments for better positioning of goods (shelf-positioning) which are not related to a promotion.

At this stage the investigation will focus on Tesco only and not extend to other retailers.
If, during the investigation evidence is presented to the GCA which indicates that the same practices have been carried out by other designated retailers, consideration will be given to extending the scope of the investigation to include them.