Tesco has apologised and stressed it is a changed organisation with much improved supplier relationships, as it accepted the stinging findings of Groceries Code Adjudicator Christine Tacon into its supplier dealings today.
Tacon’s long-anticipated report, which covers the period of 25 June 2013 to 5 February 2015, found Tesco had breached the Groceries Supply Code of Practice (GSCOP) by deducting payments from suppliers so its buyers could hit profit targets as well as “systematically” delaying payments to inflate its margins.
Tesco said it accepted the findings, which mirrored its own investigations, and stressed its business practices had changed dramatically since the period investigated by Tacon.
“In 2014 we undertook our own review into certain historic practices, which were both unsustainable and harmful to our suppliers,” said CEO Dave Lewis. ”We shared these practices with the Adjudicator, and publicly apologised. Today, I would like to apologise again. We are sorry.
Since that time, significant changes had been made to Tesco’s practices, Lewis added. “We have changed the way we work by reorganising, refocusing and retraining our teams and we will continue to work in a way which is consistent with the recommendations.”
Suppliers now felt much more positive about working with Tesco, the retailer noted, pointing to a range or initiatives it had implemented to improve transparency and fairness in its supplier dealings.
This included publishing its payment terms, introducing 14-day payment terms for small and medium-sized suppliers, as well as creating a Supplier Network and a supplier helpline to resolve problems within 48 hours.
“We have made a lot of progress, but there is still more we can do,” Lewis said. “Today our colleagues are empowered to do the right thing for our customers and for our suppliers, and I am extremely proud of the way they have responded over the past year.”