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Tesco defends new supplier cuts

Tesco defended itself this week over reports it was demanding price cuts from small suppliers, saying it held regular talks to obtain the best prices for customers.

The troubled supermarket reportedly sent emails to its 3,000 suppliers demanding they lower prices to reflect falling raw material costs. It warned that they risk seeing products taken off the shelves if they refuse to comply.

A Tesco spokesman told Drapers: “We work with over 3,000 suppliers across the UK and hold regular discussions with them on how to provide the best products and great value for customers.”

Last week the supermarket regulator said it would launch an investigation into the way Tesco treated suppliers. It is not yet known how clothing suppliers for F&F will be affected.

Tesco’s chief executive Dave Lewis said he would overhaul the business’s relationship with suppliers and launched an online network for them to improve its communication with suppliers and provide a platform for them to share ideas and address common challenges.

Members of the new Tesco Supplier Network will be able to learn more about the company’s strategy and connect directly with Tesco staff, as well as other suppliers.

Last month a number of suppliers told Drapers of the ‘difficult’ working practices they had encountered while working with Tesco’s clothing arm F&F and Drapers reveled last week that Tesco F&F international sourcing and logistics director Christophe Roussel is leaving the business at the end of the month.

@jillgeoghegan

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