Back in October last year, Tesco Chief Executive Dave Lewis announced new payment policies, which will see smaller suppliers, who deliver up to £100,000 worth of products in a year, paid within 14 days. Medium-sized suppliers who deliver up to £10 million in product value per year, will have their accounts settled five days quicker than larger suppliers in their category.


This was in advance and presumably in anticipation of a full report last week from the Groceries Code Adjudicator, who has now told Tesco to introduce significant changes to practices and systems after finding Britain’s largest supermarket seriously breached a legally-binding Groceries Supply Code of Practice (the Code) to protect groceries suppliers.

Ms Tacon has used her powers to order the retailer to make significant changes in the way it deals with payments to suppliers. Tesco were lucky not to be fined as the Adjudicator commenced her investigation before receiving the powers to financially penalise such delinquencies. This will be different if Tesco fail to act as she now requires.

Hopefully Tesco will now lead the sector and indeed all large companies across sectors, by example and set the standards for all to follow. Holland and Barrett are next in line to demonstrates unfair practices by unilaterally demanding a 5% cost reduction from all suppliers.

We shall see who chooses the fairness high ground. However, it looks clear enough that tough regulation is required to ensure prompt payment becomes the norm – especially for small and medium sized suppliers…

Meantime Tesco has to live up to its promises and finalise the introduction of all these changes by end June 2016.