Tesco, Britian's biggest supermarket, placed its financial well-being first over its obligations and responsibilities to its suppliers in violation of the United Kingdom's industry code that had been designed to protect them. That is the finding of the Christine Tacon, the GrocerY Code Adjudicator of the United Kingdom, who launched an investigation into Tesco's bloated profit margins in February 2015.
According to UK Reuters, the trigger that launched the investigation was the financial statement filed by Tesco in 2014, which amounted to what turned out to be L263 million in overprofitability. The resulting investigation showed that Tesco took an extremely long time in paying its suppliers. It also launched another government scrutiny, this time into the possible commitment of fraud. The crisis continued to rock Tesco and places it into a shaky legal and financial ground that still has to be stabilize. Several of its high-level executives have already resigned.
In a related report filed by BBC News, Tacon made strong statements itemizing the impact of Tesco's misdeeds against the affected groceries, as well as on the supermarket industry as a whole. Tesco suppliers suffered enormous multi-million-pound losses, leading to the closure of some. Relationship between retailers and groceries were adversely damaged, and a lot of time was lost which could have been spent on addressing the interests of consumers.
The Daily Mail discussed the penalties that could be set on Tesco. Fines could not be implemented, as the Ms. Tacon was granted the power to issue them only after the investigation had been launched. However, the Adjudicator did say that had the power to issue fines been present, she would have considered taking such an action. She would also determine the value of the fine and the cost that Tesco would have to pay.
