Tesco has met the requirements of Groceries Code Adjudicator Christine Tacon to clean up its act following her investigation into the retailer.
In a new progress report, published this week, Tacon confirmed that Tesco had put in place the demands of the Adjudicator and met most other recommendations she made after the landmark probe, though it had still not been paying all its suppliers in accordance with their agreements, it revealed.
Tacon, who at the beginning of this year found Tesco guilty of systematic breaches of the code, made a series of demands for improvements, as well as a further set of recommended behaviour changes in the aftermath of her year-long investigation.
It found Tesco’s buyers had systematically used negotiations with suppliers to prop up its ailing profits by illegally deducting huge sums from companies and delaying payments owed to them.
The Adjudicator required Tesco to provide a detailed implementation plan within four weeks of publication of the investigation report in February, setting out how it would comply with the recommendations. She also demanded a response from Tesco to the recommendations on a quarterly basis, including an analysis of reasons for any invoice errors and evidence that systems were being improved to reduce errors caused by Tesco; value of invoices in dispute; number of invoices in dispute and average length of time of invoices in dispute.
As for her recommendations, the first urged Tesco to pay money owed to suppliers in accordance with the terms for payment agreed. Tacon said Tesco still had not fully met this, but had made progress.
“While noting the progress still to be made, in particular on the new terms and conditions being agreed with suppliers, I consider that Tesco has an appropriate approach to follow this recommendation,” says the report. “I will monitor compliance through the provision of information by Tesco, including on the rate of acceptance of the new terms and conditions.”
She said Tesco had met her recommendation to not make unilateral deductions and to resolve data input errors identified by suppliers promptly.
The retailer had also acted on her advice to “provide transparency and clarity in dealing with suppliers” and train its finance teams and buyers in the findings from the investigation.
“I’m pleased that continued progress has been made since I made these recommendations,” Tacon told The Grocer.
“I recognise the significant work and investment that has gone into making these changes to implement my recommendations.”
A Tesco spokesman said: “We’re pleased at the Groceries Code Adjudicator’s positive findings on our implementation of her recommendations. We’ve made fundamental changes to the way we operate to ensure we build transparent, long-term partnerships with our suppliers. These changes are having a positive effect, with both the GCA’s annual supplier survey and our own supplier viewpoint results, showing a marked improvement in how our suppliers view their relationship with Tesco.”
Tacon’s report comes a little over a week since three former senior directors at Tesco were charged with fraud in relation to the £263m accounting scandal at the supermarket giant.
The Serious Fraud Office (SFO) announced it was charging Carl Rogberg, Chris Bush and John Scouler with Fraud and False Accounting related to alleged activity taking place from February to September 2014.
Tesco said at the time it was confident an “extensive programme of change” had made huge changes since the time of the alleged fraud.