LONDON – Britain’s supermarket ombudsman is launching an investigation into the trading practices of Tesco, one of the world’s largest retailers.
Groceries Code Adjudicator Christine Tacon says there’s “reasonable suspicion” Tesco breached rules covering the treatment of suppliers. The probe is expected to take nine months and will focus on delayed payments and whether suppliers were asked to pay for better placement of products.
The probe will pile more pressure on Tesco, which is struggling to compete with low-cost rivals. A separate probe is examining why Tesco overstated its half-year profit by some 250 million pounds ($381 million).
The investigation is the first by the ombudsman’s office, created last year to regulate relations between the largest retailers and their suppliers. Tesco says it has already changed the way it works with suppliers.