Retailer delayed payments to suppliers in breach of the Code of Practice, but can't be fined
After a year-long investigation, the Groceries Code Adjudicator, Christine Tacon, has found that Tesco breached the clause in the Groceries Supply Code of Practice that prohibits delays in payments to suppliers. She found that delaying payments, sometimes by many months, was a widespread practice affecting a broad range of suppliers on a significant scale. Factors included poor administrative practices within Tesco, poor communication with suppliers, and inadequate systems for correcting errors. A key 'cultural' factor was Tesco's reluctance to engage with suppliers in order to resolve difficulties; Tacon also crticised the tendency for buyers to use outstanding payments as leverage in negotiations over future supplies. Although the breach was 'unreasonable and unacceptable', the GCA was unable to impose a fine because the breach was committed before she was given the power to fine offenders. She reported that she had received assurances from the retailer that procedures had now been changed.
Read the letter published in the Telegraph, supporting the GCA's action, signed by Sustain, the National Farmer's Union, Traidcraft, Feedback Global and the Fairtrade Foundation.
Published Friday 29 January 2016
Sustain: Sustain The alliance for better food and farming advocates food and agriculture policies and practices that enhance the health and welfare of people and animals, improve the working and living environment, enrich society and culture and promote equity.
