Tesco drinks division ‘not likely implicated’

Tesco’s beer, wine and spirits division is not likely to have contributed much, if anything, to the supermarket’s £250 million accounting ‘black hole’ – despite its director Dan Jago being suspended pending investigation – according to wine retail consultant Allan Cheesman.

Tesco’s drinks division has been defended by industry veteran Allan Cheesman (Photo:Wiki)

Mr Cheesman, who formerly headed UK retail giant Sainsbury’s wine operations, said that Tesco BWS’s protocols for tracking cash flow to-and-from suppliers are up to standard.

He also said that with so few “mega suppliers” involved in Tesco’s drinks operation – and smaller volumes in comparison to other divisions of the supermarket – that even if there was an accounting mistake by BWS, it could not have been a large proportion of the £250m missing from Tesco’s profits.

Speaking exclusively to the drinks business, Mr Cheesman, who has 42 years in the industry behind him, said, “In any dealings with suppliers there are various sources of income and support, and I am sure Tesco has tried and tested methods to track and account for these not inconsiderable funds.”

He continued, “I’m not sure the alcohol volumes would add much [to the gap in the accounts] and there are only a few mega suppliers in BWS –Diageo, Accolade, SABMiller and Pernod Ricard – and they are a shrewd bunch.”

Recent reports have suggested that “inappropriate behaviour” has indeed taken place between some Tesco employees and suppliers, with speculation that future sales have been intentionally and surreptitiously brought forward and accounted for to help bolster the supermarket’s perceived performance.

Allan Cheesman is an international wine retail consultant with 42 years of experience in the trade (Photo: db)

These claims however have not been backed by named sources, and Tesco has so far refused to go into the detail of its investigation, which is being headed by external accountancy and law firms.

Mr Cheesman said that while he’s sure this practice “did and does go on” at Tesco, the supermarket’s drinks division is highly reputable, and it is more likely to be the fault of the “bean counters” and the “corporate lot” who are trying “to satisfy the City [of London] and shareholders” rather than Tesco BWS, which he described as “one of the best in the field”.

Mr Cheesman also defended Tesco BWS director Dan Jago – who was suspended last week joining six other executives while an investigation takes place – saying that he is “without doubt one of the most conscientious , professional and likeable” members of the drinks industry.

Tesco is expected to reveal details of its investigation this week when it publishes its delayed interim report.