Tesco must pay £1m costs for watchdog investigation

Tesco

Tesco has been forced to pay £1m towards the costs of the grocery watchdog’s investigation that found the supermarket had deliberately delayed payments to suppliers to boost profits.

The grocery code adjudicator (GCA), Christine Tacon, instructed Tesco to make the payment, which will cover the majority of her £1.2m costs relating to the year-long investigation.

The payment was not a punitive measure. Tacon was unable to fine the supermarket as its breaches of the code took place before her power to levy fines worth up to 1% of turnover came into force in April last year.

Tacon said: “I asked Tesco to contribute this money, which is a sizeable sum for any business.”

The watchdog’s funding comes from the retailers it oversees – all of which sell more than £1bn worth of groceries in the UK annually. The 10 retailers covered by the code pay an annual levy and the GCA can instruct them to pay further costs if they are found to have breached the industry code.

Tesco was ordered to make significant changes to the way it deals with suppliers after the GCA found the supermarket had deliberately delayed payments to boost its profits.

Tacon said Tesco had seriously breached the legally binding code governing the grocery market. Some suppliers had to wait two years for millions of pounds owed by the grocer.

The adjudicator launched the investigation in February last year after Tesco admitted it had overstated profits in a scandal that has also led to a Serious Fraud Office investigation.

Powered by Guardian.co.ukThis article was written by Sarah Butler, for The Guardian on Wednesday 3rd February 2016 17.13 Europe/London

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