The fallout from The Grocer Code Adjudicator’s decision to launch a formal investigation continued over the weekend.
Most notably the Sunday Times had a story that Tesco is demanding that suppliers cut their prices to reflect falling raw material costs —warning them they risk seeing products taken off the shelves if they refuse to comply. The paper cites emails sent to suppliers in which the supermarket giant demands price cuts because commodity prices have fallen sharply. When suppliers refused, Tesco replied that it would have to consider its support for their products. (The Times £)
News of the latest ultimatums from Tesco provoked a furious reaction last night from the Forum of Private Business. Phil Orford, chief executive, said the supermarket’s latest actions “demonstrate a complete disregard for any moral or ethical dealings with their supply chains” (The Telegraph). Tesco sought to defuse the row, telling City AM last night: “We work with over 3,000 suppliers across the UK and hold regular discussions with them on how to provide the best products and great value for customers.” (City A.M.)
On a more positive note, Tesco is showing how to exit the ebooks business “gracefully” having handed its customers over to Kobo and preserved its libraries after a deal to sell Blinkbox Books to Waterstones fell through (The Guardian)
Rexam’s board is keen to finalise a £4.3bn buyout offer from rival can-maker Ball, according to City A.M. The paper says that bosses are thought to see the merger as the next obvious step in building the business, giving the two giants even more scale (City A.M.). Writing in the Sunday Times, Dominic O’Connell argues that the challenge for Rexam CEO Graham Chipchase is to deliver the kind of price he has dangled in front of shareholders. If he can, “they might well buy him something that comes in a bottle to celebrate” (The Times £).
Poundworld could be next budget retailer to change hands after rival Poundland’s plan to buy 99p Stores chain as the group has been working with PricewaterhouseCoopers on strategic options including a potential sale (The Daily Mail).
British shoppers are complaining about retailers more than ever as consumer dissatisfaction doubles in 12 months. Internet retailing is the main culprit for the sharp rise in grievances (The Telegraph).
New guidance aims to” keep products of pirate fishing out of UK supply chain”, according to The Guardian. A briefing note by retailers, conservation and human rights groups has set out steps to end long-term threat of illegal fishing while building up sustainable fisheries (The Guardian).
“Is the alcopop back in fashion?” wonders The Telegraph, suggesting reports of the death of alcopops have been greatly exaggerated (The Telegraph).
The Mail has a piece on last week’s innovative crowdsourced IPO of Burgundy wine producer Domaine Chanzy. It concludes: “This flotation is a good punt for wine lovers but they should not bet the farm on it.” (The Daily Mail).
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