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| Tesco investigated by new regulator | Tesco investigated by new regulator |
| (about 3 hours later) | |
| Tesco is to face another investigation, this time into its relations with suppliers, amid concerns it breached the Groceries Supply Code of Practice. | |
| The Groceries Code Adjudicator (GCA) joins the Serious Fraud Office and the Financial Reporting Council in investigating the supermarket chain. | The Groceries Code Adjudicator (GCA) joins the Serious Fraud Office and the Financial Reporting Council in investigating the supermarket chain. |
| The adjudicator, Christine Tacon, said she had "reasonable suspicion" that the code had been breached. | The adjudicator, Christine Tacon, said she had "reasonable suspicion" that the code had been breached. |
| She said other supermarkets might also be investigated. | |
| However, the GCA will not be able to fine Tesco for past offences. | However, the GCA will not be able to fine Tesco for past offences. |
| In a statement, Business Secretary Vince Cable said: "Last week I secured the final agreement in government to proceed with legislation to enable the regulator to impose hefty fines for those supermarkets found guilty of mistreating suppliers." | In a statement, Business Secretary Vince Cable said: "Last week I secured the final agreement in government to proceed with legislation to enable the regulator to impose hefty fines for those supermarkets found guilty of mistreating suppliers." |
| These penalties on large retailers could total up to 1% of their annual UK turnover. | These penalties on large retailers could total up to 1% of their annual UK turnover. |
| But Ms Tacon told the BBC that despite this legislation, she could not force Tesco to pay a penalty, because the offences would have been committed before she was given the power to impose fines. | But Ms Tacon told the BBC that despite this legislation, she could not force Tesco to pay a penalty, because the offences would have been committed before she was given the power to impose fines. |
| Christine Tacon, groceries code adjudicator | Christine Tacon, groceries code adjudicator |
| Tesco: Where it went wrong | Tesco: Where it went wrong |
| The GCA will look into Tesco's profits and delays in payments to suppliers and the investigation is expected to take up to nine months. | The GCA will look into Tesco's profits and delays in payments to suppliers and the investigation is expected to take up to nine months. |
| Mr Cable said: "This is an historic day for the groceries code adjudicator and shows we have created a regulator that has real teeth. | Mr Cable said: "This is an historic day for the groceries code adjudicator and shows we have created a regulator that has real teeth. |
| I have also agreed an increase of almost 40% in the adjudicator's funding for the coming year, so that it can carry out more of its important work. | I have also agreed an increase of almost 40% in the adjudicator's funding for the coming year, so that it can carry out more of its important work. |
| Now that a formal investigation has been launched, I would encourage anyone with any evidence of wrongdoing to come forward and to be confident of being able to do so confidentially, as their anonymity will be protected by law." | Now that a formal investigation has been launched, I would encourage anyone with any evidence of wrongdoing to come forward and to be confident of being able to do so confidentially, as their anonymity will be protected by law." |
| Ms Tacon said: "This is the first investigation I have launched and it is a significant step for the GCA. | Ms Tacon said: "This is the first investigation I have launched and it is a significant step for the GCA. |
| "I have applied the GCA published prioritisation principles to each of the practices under consideration and have evidence that they were not isolated incidents, each involving a number of suppliers and significant sums of money." | "I have applied the GCA published prioritisation principles to each of the practices under consideration and have evidence that they were not isolated incidents, each involving a number of suppliers and significant sums of money." |
| Analysis: Kamal Ahmed, business editor | Analysis: Kamal Ahmed, business editor |
| One frustration Christine Tacon will be feeling this morning is over her inability to fine Tesco - or any other supermarket for that matter - if she finds that supplier regulations have been breached in the past. | One frustration Christine Tacon will be feeling this morning is over her inability to fine Tesco - or any other supermarket for that matter - if she finds that supplier regulations have been breached in the past. |
| As Panorama revealed last month, she first applied for powers to fine supermarkets up to 1% of UK revenues in December 2013. In Tesco's case, that would mean a figure well north of £400m. | As Panorama revealed last month, she first applied for powers to fine supermarkets up to 1% of UK revenues in December 2013. In Tesco's case, that would mean a figure well north of £400m. |
| There was then a delay of over a year before the government finally acted to grant those powers last month - two weeks after the BBC revealed the delay. | There was then a delay of over a year before the government finally acted to grant those powers last month - two weeks after the BBC revealed the delay. |
| Vince Cable blamed inertia in the Treasury for the snail's pace approach. | Vince Cable blamed inertia in the Treasury for the snail's pace approach. |
| Ms Tacon cannot use her fining powers retrospectively, so is left with "legally binding recommendations" and naming and shaming in her arsenal of sanctions against Tesco if wrongdoing is found. | Ms Tacon cannot use her fining powers retrospectively, so is left with "legally binding recommendations" and naming and shaming in her arsenal of sanctions against Tesco if wrongdoing is found. |
| Ms Tacon has called for evidence to be submitted by 3 April. | Ms Tacon has called for evidence to be submitted by 3 April. |
| A Tesco spokesperson said: "We have worked closely with the office of the adjudicator since its creation to put in place strong compliance processes. | A Tesco spokesperson said: "We have worked closely with the office of the adjudicator since its creation to put in place strong compliance processes. |
| "An internal review we carried out and shared with the GCA identified some areas of concern. | "An internal review we carried out and shared with the GCA identified some areas of concern. |
| "We have taken action to strengthen compliance and, as we have announced, we are changing the way we work with suppliers." | "We have taken action to strengthen compliance and, as we have announced, we are changing the way we work with suppliers." |
| Clive Black, an analyst at Shore Capital stockbrokers, told the BBC that the GCA investigation "feels very much like self-justification by an organisation that has talked much but not actually done anything of note in practical terms to our minds". | Clive Black, an analyst at Shore Capital stockbrokers, told the BBC that the GCA investigation "feels very much like self-justification by an organisation that has talked much but not actually done anything of note in practical terms to our minds". |
| Chris Brook-Carter, editor in chief at Retail Week said: "This is not great news in terms of [Tesco's] reputation, but that reputation took such a dent last year." | Chris Brook-Carter, editor in chief at Retail Week said: "This is not great news in terms of [Tesco's] reputation, but that reputation took such a dent last year." |
| He added: "I'm not sure that even if they are found guilty it is going to put them in much worse a position at the moment." | He added: "I'm not sure that even if they are found guilty it is going to put them in much worse a position at the moment." |
| Analysis: Mark Broad, business producer | Analysis: Mark Broad, business producer |
| Despite being set up more than 18 months ago the Groceries Code Adjudicator still does not have the power to fine retailers that break the code. | Despite being set up more than 18 months ago the Groceries Code Adjudicator still does not have the power to fine retailers that break the code. |
| A Whitehall blockage has delayed the necessary legislation, meaning that if Tesco is found guilty the punishment could be as little as issuing an apology in the national press. | A Whitehall blockage has delayed the necessary legislation, meaning that if Tesco is found guilty the punishment could be as little as issuing an apology in the national press. |
| If the legislation had been passed and a supermarket was found guilty, it could be facing multi-million-pound fines. | If the legislation had been passed and a supermarket was found guilty, it could be facing multi-million-pound fines. |
| Unlike other industry regulators, the GCA is a modest organisation - it has just five staff. | Unlike other industry regulators, the GCA is a modest organisation - it has just five staff. |
| The head of the organisation, Christine Tacon, works a three-day week. | The head of the organisation, Christine Tacon, works a three-day week. |
| What's more, many supermarket suppliers say they fear going to the GCA to complain as they depend on the major retailers for their survival. | What's more, many supermarket suppliers say they fear going to the GCA to complain as they depend on the major retailers for their survival. |
| The GCA hardly sounds like a regulator with teeth. | The GCA hardly sounds like a regulator with teeth. |
| Have you supplied Tesco? Have you been affected by the issues raised in this story? You can email haveyoursay@bbc.co.uk with your experience. Please include a telephone number if you are willing to be contacted by a BBC journalist. | Have you supplied Tesco? Have you been affected by the issues raised in this story? You can email haveyoursay@bbc.co.uk with your experience. Please include a telephone number if you are willing to be contacted by a BBC journalist. |
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