Tesco GSCOP report is making a difference - and there's more to come

Ten days on from my Tesco investigation report, it’s a good time to reflect on how my findings and recommendations have been received. 

Overall, the response has been positive, with suppliers and commentators saying I have shone a light on some murky areas. But there has been some comment that it is a ‘Pyrrhic victory’; why bother to go ahead without the power to fine and when Dave Lewis had already apologised? 

Firstly, it is my job to investigate where I believe there has been a serious breach of the Groceries Supply Code of Practice. I launched my investigation in February, having requested information from Tesco. I was already eight months into it when the company publicly apologised to suppliers. 

My investigation went deeper than the Tesco report to me. It was a very thorough analysis of an 18-month period and revealed a wealth of detail as well as the extent of Tesco practices. It also covered the supplier side of the story that Tesco could not include in its internal enquiries. 

Yes, I would have liked to have had the power to fine when I began my investigation. But I have required Tesco to contribute over £1m towards the investigation costs. Ultimately, I’d prefer to be judged on behaviour change in the sector rather than any fines I impose, and I welcome the changes Tesco is making. 

My recommendations will require changes to Tesco processes. For example, the seven-day deadline for resolving pricing errors is specific and challenging. I will be formally monitoring progress and requiring evidence that the deadlines are being met.

The findings are relevant to all the retailers and I have already made that clear to the Code Compliance Officers. Now there can be no doubt about my interpretation of delay in payments and what I regard as reasonable time for resolving payment issues. I have put all CCOs on notice that they must be really well-informed about what is going on at buyer level.

Adam Leyland reports growing supplier grumbles about the aggressive pursuit of back margin payments by other retailers. I want to hear about them. If I hear that other retailers are adopting unreasonable practices I can carry out another investigation, just as I can investigate Tesco again if my recommendations are not being followed. And I now have the power to fine.

Finally, I uncovered a range of practices relating to better positioning or an increase in shelf space that require further scrutiny. In general, I do not have an issue with range reviews, category captaincy and category management, but the evidence gave me concerns about the surprising frequency of reviews and the substantial sums involved.

I am concerned these practices have evolved in the 15 years since the Competition Commission’s review and may be having a significant impact on consumer choice.

My consultation will be launched after Easter and will help me understand how widespread these practices are and their effect on competition and choice. This is the chance for the sector - retailers and suppliers - to let me know their views.

Christine Tacon is the Groceries Code Adjudicator