Record Tesco profits reignite calls for retailer watchdog

The government has been urged to back the introduction of a supermarket ombudsman and not be blinded by the financial success of Tesco.

Speaking after the retailer announced record pre-tax profits of £3.13bn, NFU president Peter Kendall said savings passed on to consumers often came as a result of unreasonable demands being placed on suppliers.

“My worry is that, as the UK’s flagship retailer weighs in with another record-breaking set of results, the government may be blinded by Tesco as one of the few bright lights in the economy and forget its competition responsibilities,” he said.

“Following the conclusion of the Competition Commission investigation last year, it is clear that unreasonable behaviour impacts on the consumer.

“In the consumer’s best interests, the government must implement the commission’s remedies, including a grocery market ombudsman, if it is unable to secure undertakings from retailers such as Tesco.”

Tim Farron, Liberal Democrat shadow environment secretary, said while it was good to see businesses doing well in the recession, there was a strong need for a legally-binding supermarket code of conduct.

“We shouldn’t lose sight of the fact that these huge profits have been built by exploiting small family farmers by paying them a pittance for their produce,” he said.

“Tesco controls over 30% of the UK food market. There can be little doubt that a powerful supermarket monopoly has damaged farmers and weakened rural areas.”

What do you think about Tesco’s profit – is it at the expense of farmer suppliers? Tell us on the FWi forums.

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