Criticism of Tesco
Criticism has been directed at Tesco from various groups, both national organisations and individuals. One of the biggest criticisms it faces is the perceived threat it poses to small businesses due to the monopoly it imposes over products. There is also a belief that they use aggressive tactics to gain land and/or planning permission for building new stores. Other controversial areas concern the treatment of staff and customers, as well as their approach to foreign businesses.
The Tesco supermarket chain is often involved in litigation, usually from claims of personal injury from customers, claims of unfair dismissal from staff, and other commercial matters.
- 1 United Kingdom
- 1.1 Corporate policy
- 1.2 The Company's 'Land Bank'
- 1.3 Facebook and Tesco
- 1.4 Financial Affairs
- 1.5 Service levels
- 1.6 Health and safety issues
- 2 Outside the UK
- 3 See also
- 4 References
- 5 External links
Two notable cases were Ward v Tesco Stores Ltd, which set a precedent in so-called 'trip and slip' injury claims against retailers, and Tesco Supermarkets Ltd v Nattrass, which reached the House of Lords and became a leading case regarding the corporate liability of businesses for failures of their store managers (in a case of misleading advertising). Accusations concerning the use of cheap and/or child labour in Bangladesh amongst other places, have also arisen since 2000.
Tesco has been subject to several claims of apparently out-of-date food being 'back-labelled' to appear still to be within date, poor café hygiene and a staff member contracting legionnaires' disease in the Wrexham store.
The UK's Competition Commission inquiry
In 2006 the Office of Fair Trading (OFT) referred the UK grocery market to the Competition Commission for a new inquiry. In January 2007 the Competition Commission published its initial findings into the UK grocery market. It said that they were "concerned with whether Tesco or any other supermarket can get into such a strong position, either nationally or locally, that no other retailer can compete effectively". However it found no actual basis for accusations that Tesco could use its land bank to control nearly half of national grocery retailing, or that suppliers' profits were being squeezed by the supermarket.
The Company's 'Land Bank'
Criticism of Tesco includes allegations of stifling competition due to its undeveloped "land bank", pugilistically aggressive new store development without real consideration of the wishes, needs and consequences to local communities, using cheap and/or child labour, opposition to its move into the convenience sector and breaching planning laws.
In Autumn 2006, Tesco was caught up in two scandals over the treatment of workers in factories supplying it in Bangladesh. The first was a Channel 4 News investigation, which found child labour in four such factories. The second was a report published by War on Want, which alleged that wages were as low as 5 pence per hour, with workers often working 80+ hour weeks. In its defence, Tesco said that, "All suppliers to Tesco must demonstrate that they meet our ethical standards on worker welfare, which are closely monitored. Our suppliers comply with local labour laws, and workers at all Bangladeshi suppliers to Tesco are paid above the national minimum wage." Campaigners have argued that the minimum wage in Bangladesh is too low, and that monitoring systems used by clothing retailers are ineffective. Tesco apologised for selling anti Jewish literature to customers in Ireland. Sheikh Dr Shaheed Satardien, head of the Muslim Council of Ireland, said this was effectively "polluting the minds of impressionable young Islamic people with hate and anger towards the Jewish community."
Pricing and advertising
The group has been criticised for its tactics, including allegedly misleading consumers with "phoney" price cuts. For example, advertising huge savings, when in fact they are only lowering the price of less popular items and raising the price of more popular goods.
Tesco in Ireland was convicted of failing to properly display prices by the National Consumer Agency in July 2008. An advertisement in 2011 for pork sausages resulted in complaints to the Advertising Standards Authority (ASA), for implying that the meat came from free range pigs. The complaints were upheld, with the ASA agreeing that the advertisement was misleading. Tesco said it was baffled because the farm shown supplied meat from pigs that were born outdoors and reared indoors.
Tesco is also censured by those who think that it infringes upon the interests of farmers and smaller suppliers. The company responds by claiming that it follows industry-best practice and sources supplies locally where it can to meet customer demand. In March 2005 the Office of Fair Trading published an audit of the workings of its code of practice on relations between supermarkets and their suppliers. It reported that no official complaints had been received against Tesco or any of the other major supermarkets, but the supermarkets' critics, including Friends of the Earth, contested that suppliers were prevented from complaining by fear of losing business, and called for more rigorous supervision of the supermarkets. A further report by the Office of Fair Trading in August 2005 concluded that the aims of the Code of Practice were being met.
In September 2006 Tesco came to an agreement with Tyrrells Crisps to stop selling grey market supplies. Tyrrells was started by potato farmer Will Chase after big supermarkets' purchasing-power almost put his farm out of business. He started Tyrrells to gain greater margin by selling directly, and only sold through delicatessens and Waitrose supermarket. After Tesco bought supplies from the grey market, Chase sought legal advice but Tesco backed down.
In May 2004, Tesco announced it was reducing sick pay in an attempt to reduce levels of unplanned absence, which led to concerns over employees continuing to work despite poor health (otherwise faced with a reduced income).
American union leaders, aspiring to represent employees of Tesco's Fresh & Easy brand, have complained that a "stark contrast" exists between the way the supermarket chain treats its British workers and staff at its US business.
In February 2006, a group of UK MPs produced a report highlighting the near-monopolistic powers of the big four supermarkets. One problem discussed by the group was that of building without appropriate planning permission. The discussion stemmed from the company's building of a store in Stockport that was 20% larger than the company actually had permission to build. In September 2006, subsequent (retrospective) planning permission was sought by Tesco but refused.
In January 2005, Tesco faced criticism for their testing of RFID tags used to collect information on product movement in pilot stores. Critics label the tags "Spy Chips" and allege that they are to be used to collect information on customers' shopping habits.
Facebook and Tesco
On 5 April 2008 it was reported that Tesco was suing The Guardian for libel and malicious falsehood over the newspaper's claims that Tesco has developed a complex taxation structure involving offshore bank accounts in the tax haven of the Cayman Islands.
Tesco's Kick Drink
On 16 April 2007, BBC Northern Ireland's current affairs programme Newsline reported that the head of Newtownbreda High School in Belfast wanted its local Tesco store to stop selling the Kick energy drink, which was thought to be responsible for caffeine-induced misbehaviour in the classroom. The school had gone so far as to ban children from bringing the drink on to its grounds. In other schools it was also connected with caffeine addiction problems and insomnia in young male pupils.
Home delivery services
In 2007 Tesco received criticism for failing to deliver groceries via online shopping to a university campus in Sussex, offering no refund or apology. This sparked a local backlash from many customers who had had similar dissatisfying experiences with Tesco's online delivery service.
In December 2006 The Grocer magazine published a study which named Tesco as having the slowest checkouts of the six major supermarkets. Somerfield had the shortest queues with an average wait of 4 min 23 seconds. In order of least time spent at the checkout, the other major supermarkets were Waitrose, Sainsbury's, Asda, Morrisons.
Health and safety issues
Food hygiene allegations
On 22 May 2007 the BBC's Whistleblower programme showed undercover footage detailing breaches of food hygiene rules in a branch of Tesco. The Whistleblower reporter applied for a job following a tip-off from a former employee. Breaches included the sale of products after their sell-by date; allegations that the company illegally sold 'back-labelled' products after their use-by date; falsification of temperature records; and the sale of partially cooked mince mixed with uncooked mince.
The Food Safety Authority of Ireland has on a number of occasions ordered the recall of Tesco branded products, including a case of glass contamination. Environmental Health Officers served a closure order on Tesco's store in Prussia Street, Dublin, the day after they inspected it, for a number of breaches of Food Hygiene Regulations.
Outside the UK
Tesco Ireland is the largest food retailer in Ireland, with over 13,500 employees. As of 2004[update] Tesco Ireland has come in for increased criticism for apparently high prices in its Irish stores, although in its favour this seems to be because comparisons are with the British Tesco stores rather than other Irish retailers – and thus, officially speaking, like goods are not being compared with like. However, there have been general criticisms of the similar pricing between Irish supermarkets, and economic reports noting the high prices in Ireland generally. Research from Forfas, concluded that only a five per cent difference in the cost of goods between North and South was justifiable. The findings highlighted retailers' larger margins in the South vis-a-vis their operations in the North, and the Minister for Enterprise queried why the price differential in many identical goods was substantially in excess of 5%.
A report by the independent retailers group RGDATA contained allegations that Tesco overcharged customers. The report shows that customers in six Tesco stores were overcharged by an average of 3% on some items.
In July 2008 Tesco Ireland was convicted of failing to display prices properly by the National Consumer Agency.
The Food Safety Authority of Ireland, has on a number of occasions ordered the recall of Tesco branded products, including a case of glass contamination. Environmental Health Officers served a closure order on Tesco's store in Prussia Street, Dublin, the day after they inspected it, for a number of breaches of Food Hygiene Regulations. Most food is imported from Britain, where the BBC's Whistleblower programme showed undercover footage showing the sale of products after their sell-by date; allegations that the company illegally sold 'back-labelled' products after their use by date; falsification of temperature records; and the sale of partially cooked mince mixed with uncooked mince.
The British-owned supermarket refused to stock any of the one million postcards which are aimed at closing the controversial plant at Sellafield in Cumbria. Dunnes Stores and Superquinn, along with other retailers across the country, did sell the postcards.
The Advertising Standards Authority in January 2009 found that Tesco advertising was misleading.
Tesco tried to hide its policy from Irish people of buying directly from UK suppliers. An internal document said that a key objective was ensuring its policy of taking deliveries directly from UK suppliers went unnoticed and remained "invisible to the Irish customer". At the same time the president of the Irish Farmers' Association said there was deep anger about Tesco's decision to displace local produce with imports and that it "will inevitably lead to thousands of job losses and will put Irish producers of local, fresh produce out of business."
Tesco used “Change for Good” as advertising, which is trademarked by Unicef for charity usage but is not trademarked for commercial or retail use, which prompted the agency to say "it is the first time in Unicef’s history that a commercial entity has purposely set out to capitalise on one of our campaigns and subsequently damage an income stream which several of our programmes for children are dependent on”. They went on to call on the public “who have children’s welfare at heart, to consider carefully who they support when making consumer choices”.
The company was accused of sharp practice in December 2009 by forcing motorists to pay a carbon tax six hours before it became law.
The company was the subject of claims in February 2010 that it demands up to €500,000 per supplier for stocking goods. The leader of the Labour Party described the practice as "outrageous extortion" and was “like the kind of thing you expect to see in The Sopranos."
Britain’s Advertising Standards Authority said a leaflet produced by Tesco Ireland Ltd, was ‘‘irresponsible’’ and breached clauses in the advertising code on substantiation and weight control in May 2010.
Tesco pleaded guilty and was fined, after sending unsolicited marketing emails to a number of customers and for having a problem with the email "opt-out" option.
In early 2011, Tesco warned Irish publishers that it will ban their books from the shelves of the supermarket if they do not play by its rules. The best-seller which sparked the controversy, on the revelation about Sean FitzPatrick's golf meeting with Taoiseach Brian Cowen, was published in secret and distributed directly to Easons and selected bookstores – but not to Tesco or other supermarkets. The secret last-minute delivery was organised to avoid any legal complications that might have prevented publication. Tesco said "If we find evidence of this happening (again), the offending publisher will have all their titles removed from sale and returned." One publisher pointed out that Tesco sometimes implements exclusive deals itself.
In September 2011 a Greenpeace report revealed that supermarkets in China, including Tesco, were selling vegetables that contained illegal pesticides or at levels exceeding the legal limit. 16 vegetable and fruit samples were taken from Tescos in Beijing and Guangzhou. Among them, 11 were found containing pesticide residues. One leafy vegetable sample turned up two kinds of pesticides, methamidophos and monocrotophos, the use of which have been prohibited in China since the beginning of year 2007.
In Thailand, Tesco has been criticised for aggressively pursuing critics of the company. Writer and former MP Jit Siratranont faced up to two years in jail and a £16.4m libel damages claim for saying that Tesco was expanding aggressively at the expense of small local retailers. Tesco served him with writs for criminal defamation and civil libel. The case was subsequently dismissed.
There have been several complaints against Tesco in Hungary, both by customers and employees. In a recent scandal an employee, asking for her name to be kept confidential, revealed that her bosses told her, on several occasions, not to dispose of smelly raw meat products, instead she was instructed to wash the meat with sodium hypochlorite and sell it later on. Occasionally, the smelly meat product was grilled and sold like that
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