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News
Government steps up pressure on Tesco
UK business secretary Vince Cable has voiced his concerns about Tesco’s £263 million financial scandal, calling for a comprehensive review of the company’s practices.
The investigation was recently ramped up as the Serious Fraud Office announced its intention to get involved (Photo:Wiki)
It has been revealed that the business secretary wrote to supermarket ombudsman Christine Tacon in the past two weeks to lend weight to calls for an in-depth investigation into the way the supermarket – Britain’s biggest single retailer and its biggest drinks seller – treats its suppliers.
In this letter to the Groceries Code Adjudicator (GCA), which was seen by Sky News, Mr Cable made it clear the importance of the authority’s investigation both to the public and to suppliers.
The industry investigation is being carried out in conjunction with a criminal review by the Serious Fraud Office, which announced its intention to look into the matter last week. This follows an investigation by financial watchdog the Financial Conduct Authority as well as internal audits by accountancy firm Deloitte and lawyers at Freshfields.
The GCA was set up by Mr Cable two years ago after concerns were raised to him by suppliers worried about their relationships with big-chain supermarkets.
The business secretary Vince Cable has added to the pressure on Tesco (Photo: Flickr)
Many of Tesco’s suppliers are small-to-medium sized businesses heavily reliant on their contracts with Tesco, and the wine, beer and spirits sector of the business is no different.
The head of Tesco’s beer, wine and spirits division, Dan Jago, has been suspended along with seven other executives as the investigations continue, all of which was sparked by the company overstating its profits by £263 million as evidence was revealed of financial mishandling.
It was revealed by Tesco two weeks ago during the company’s delayed half-year results that the error came about by accounting for future expected profits while delaying costs. Tesco chairman Sir Richard Broadbent announced his intention to step down from the company the same day.
The turmoil at the company, which has suffered half-year profits dropping by 92%, has caused share prices to plummet and the expectation of future asset sell-offs to surface.