Reading the wash-up regarding the shock, and I do mean ‘shock’ of the latest and biggest Tesco scandal, I remembered something which I had forgotten about a long time back, which is that large suppliers of huge supermarket chains are routinely pressurised to kick-back huge sums of cash to the supermarket in order to keep their contracts to supply their goods, and remain on Tesco’s shelves; a system which is also routine. What many people also forget is that, in order to keep up their profit margins, the cost of the kick-back is added to the cost of the goods supplied, so you, the customer, pay for the supplier’s costs, kick-backs and promotions, so where does that leave the ‘promise’ of responsible marketing, with one eye at least on the cost to the consumer at the till?
But leaving behind, if you would, the whole slightly sleazy idea of making suppliers pay to have their produce and goods featured on the shelf-spaces of the largest Retailer in Great Britain, and let us concentrate instead on the truth behind firstly the profit statements, and then the profit warnings, all of which must have been known about by their auditors, namely one of the BigFour, PriceWaterhouseCoopers. The news that Tesco had virtually submitted a false prospectus, in terms of their Auditors giving the FTSE retailer a clean bill of health in May, and confirming that healthy statement by shouting out about the huge profits forecast in late August; and then suddenly bringing out the bad news in September, seems to have been missed by just about all the financial commentators, excepting the Guardian’s Aditya Chakraborty. If the new Chief Executive is to be believed, a single whistleblower exposed the scheme; when it should have been painfully obvious to a large number of highly-paid financial people whose very jobs should have depended upon noticing what was, apparently, right in front of their bleeding noses.
Somebody should be facing Court proceedings, and those charged should include, not only senior Tesco people, but top tier people from PwC as well.