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Tesco admits falling short of industry code of practice

Tesco has admitted breaching the grocery industry’s code of practice when dealing with suppliers.

In its 2015 annual report the UK retail giant said: “Regrettably, we have concluded that there have been a number of instances of probable breaches of the Code which fall short of the high standards we expect to uphold in our dealings with our suppliers.”

While no specific mention was given to F&F in the report, in January, UK-based suppliers hit out at what they described as the “unethical” and “inefficient” working practices of Tesco’s clothing arm.

The business was accused of changing and cancelling orders mid-season, and “going behind suppliers’ backs” to work with factories directly.

The following week Tesco launched an online network for suppliers to improve its communication with them and provide a platform for them to share ideas and address common challenges.

The report attempted to reiterate efforts to combat the criticism, adding: “We are taking effective action to prevent this arising again. We are fundamentally changing the way we work with our suppliers to deliver a more sustainable and collaborative business model for everyone in the supply chain.

“In addition, we are significantly up-weighting our Code compliance programme. The programme will include comprehensive new starter training and annual refresher training (which is delivered through both e-learning and in-person training), improved guidance and processes, ‘deep dive’ audits throughout the year, bi-annual compliance declarations and disciplinary action where necessary.”

The Serious Fraud Office continues to investigate the accounting scandal that led to a £326m black hole in Tesco’s profits.

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