Tesco could now be facing another investigation into its relations with suppliers after concerns were raised that the company have breached the Groceries Supply Code of Practice.

A new investigation could take place

A new investigation could take place

Already investigating the supermarket chain are the Serious Fraud Office and the Financial Reporting Council, and now the Groceries Code Adjudicator (GCA) could join them.

Christine Tacon, the adjudicator said that she has "reasonable suspicion" that the code has been breached, but the GCA isn't going to be able to fine Tesco for any past offences.

Looking into the company's profits and delays in payment to suppliers, it's a lengthy investigation which could take up to nine months.

Business Secretary Vince Cable recently said in a statement: "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."

Those fines and penalties on large retailers such as Tesco could total up to 1% of their UK turnover per year.

Speaking to the BBC, Ms Tacon added that despite the new legislation she couldn't fine Tesco, as any offences she will be looking at will have been committed before she was given the power to do so.

Vince Cable continued: "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.

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 noted that this was her first launched investigation and she has evidence to support her suspicions.

"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."

Panorama revealed last month that Ms Tacon applied for powers to fine supermarkets up to 1% of their UK revenues in December 2013, which would in Tesco's case mean a figure above £400 million.

A delay of over 12 months before the government agreed to grant those powers last month then took place - something Vince Cable blamed inertia in the Treasury for.

Ms Tacon has called for evidence to be submitted by April 3.

Meanwhile, a spokesperson for Tesco has stated: "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.

"We have taken action to strengthen compliance and, as we have announced, we are changing the way we work with suppliers."


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