A major corruption case in the potato industry has kicked off with guilty pleas from a former Sainsbury’s buyer and a former executive at potato supplier Greenvale.

Former Sainsbury’s potato buyer John Maylam pleaded guilty to accepting gifts from executives at Greenvale and admitted acquiring criminal property in the form of cash in a Luxembourg bank account between January 2006 and January 2008 in exchange for a multimillion-pound potato supply deal.

Former Greenvale operations director David Baxter, meanwhile, admitted providing gifts to Maylam and acquiring criminal property between June and July 2007.

Prosecutor Paul Ozin told Croydon Crown Court Maylam had been corrupted with “wholly excessive gifts” and hospitality to favour Greenvale over other suppliers and work against the interests of Sainsbury’s.

“A peculiar feature of the corruption was that it was self-funding,” he said. “Greenvale was not paying for it. Sainsbury’s was paying for the corruption of its own buyer – and this was achieved by overcharging Sainsbury’s.”

Maylam pushed through disproportionate increases in the price of potatoes, on occasion adding £1 per crate bought from Greenvale, Ozin said.

“They also supplied smaller packs for the same price and there were illogical prices for new packs,” he added.

Executives at Greenvale then transferred £8.7m of Sainsbury’s money into a dedicated account called The Fund, out of which they paid Maylam £4.9m, Ozin told the jury. Maylam was also treated to “very, very lavish” corporate entertainment, Ozin added, which included luxury holidays and stays at top-class restaurants and hotels.

Baxter and Maylam will now give evidence during the trial of former Greenvale finance director Andrew Behagg, who denies corruption and has entered a plea for not guilty. 

A spokeswoman for Sainsbury’s said: “An account manager at a supplier and a former buyer have pleaded guilty to corruption. Their corrupt conduct was an unacceptable and calculated crime against Sainsbury’s. It was of a magnitude never experienced in our history.”

She added Sainsbury’s demanded the highest standards of its staff and suppliers, and said Sainsbury’s code of conduct clearly set out how they were expected to behave. “This is reinforced by our confidential whistleblowing line,” she added.

“In 2008, as soon as we learnt of Mr Maylam’s actions, we reported him to the police and have co-operated with the authorities throughout their investigation. While the rest of the case is proceeding we’re unable to comment further.”

The trial continues at Croydon Crown Court, and is expected to last for three weeks.

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