Utility provider PayPoint has sparked controversy among its 10,500 independent retailer customers with plans to enable all terminals to service the Tesco mobile phone service, due for launch in autumn.

It e-mailed a group of 60 convenience chains on August 7 to sound them out about the plan.

The message, leaked to The Grocer, said that from autumn “Tesco becomes just another mobile phone network and it would be arbitrary and self-defeating not to work with them if it means your instore top-up offer is diminished”.

The e-mail said PayPoint would enable independents to take top-up payments for Tesco Telecom, as well as Tesco-owned T&S stores.

Among PayPoint customers who received the e-mail were members of The Grocer Top 50, independents, including L&F Jones, Snax 24, David Sands Supermarkets, Jacksons and several Spar operators. Budgens and several co-op societies were also on the list.

Stephen Thompson, marketing director of Scottish convenience chain Morning Noon & Night, was among the recipients. He said: “We are extremely unhappy at being asked to sell a Tesco product. On a separate issue, margins are low enough already on PayPoint.”

See this week’s copy of The Grocer for more details.