It’s no surprise that the GCA’s findings that Tesco mistreated suppliers dominate today’s coverage.
Christine Tacon found Tesco guilty of serious breaches of industry rules as it “knowingly” delayed payments to suppliers to boost its financial performance (The Times). Despite the findings, Tesco escaped any fines as Tacon was only given this power after she launched her investigation (The Mail). Tesco, which accepted the findings, said it was “a very different company” now from the one described in the report, which covers the months between June 2013 and February 2015 (The Financial Times). The Telegraph dives into the GCA report to highlight five ways Tesco turned the screw on its suppliers
The Guardian and The Telegraph write that the supermarket could have to pay huge damages of at least £100m to investors who claim to have lost tens of millions because of the accounting scandal and the subsequent fall in the Tesco share price.
Nil Pratley in The Guardian notes the warning signs were there for Tesco before asking “what on earth was it doing?”. “Almost everything you heard about Tesco’s bullying of suppliers was true,” he writes. “The new-ish Groceries Code Adjudicator could not have hoped for a plainer case of chiselling, devious and code-breaking behaviour by a supermarket. Try this internal Tesco email, detailing methods for buyers to meet financial targets: “Not paying back money owed.” This was an open and shut case. It’s not hard to see how the rot set in.”
Separately, a Guardian editorial has the headline “every little (bit of scrutiny) helps”. The paper calls for tougher regulation of the entire industry to protect suppliers and producers. “For as long as we buy most of what we eat from a few retail giants that can bully suppliers and ignore exploitation in the supply chain in order to make fat profits, the food industry will be based on a deceit. This is a system that perpetuates the big five’s advantage. Only strong regulation can mandate decent pay and a fair price for producers.”
Elsewhere, The Times reports that Sainsbury’s is close to securing the support of the Qatar Investment Authority, its largest investor, for a renewed bid for Home Retail Group ahead of the 2 February takeover deadline. The Guardian writes Qatar Investment Authority was understood to be warming to idea of tie-up with the Argos owner, but at an acceptable price. The investor has indicated it could support a £1bn-plus bid for Home Retail Group at a “modest” increase to the 130p offer rejected in November.
The Daily Mail focuses on the loss of a “key lieutenant” at Argos just days before Sainsbury’s is expected to make a fresh bid to snap up the high street chain. David Robinson, who was chief operating officer at Argos, is to Conviviality to head up the franchise arm.
The Daily Mail’s market report has some fun with the PZ Cussons results. The paper writes that investors washed their hands of the Imperial Leather soap and shampoo maker after it reported tough trading conditions in Nigeria, its biggest market. ”The shares were in a real lather as they collapsed to 241p before closing 24.3p – or nearly 9 per cent – down at a seven-year low of 249.3p.”
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