Criticism of Tesco

Main article: Tesco

This article concerns criticism of Tesco, a supermarket chain in the United Kingdom. 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 for building new stores. Other controversial areas concern the treatment of staff and customers, as well as their approach to foreign businesses.

Criticism of Tesco and related litigation

As with any large corporation, the Tesco supermarket chain is involved in litigation, usually from claims of personal injury from customers, claims of unfair dismissal from staff, and other commercial matters. 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). Criticism of Tesco includes disapproval of the effects supermarket chains can have on farmers, suppliers and smaller competitors; along with claims of generally poor labour relations with its staff concerning sick leave regulations. Accusations concerning using cheap and/or child labour in Bangladesh amongst other places, have also arisen since the millenium .

Tesco has been heavily criticised by the media in both the UK and Ireland among other places over its comparatively more ruthless and harsh business tactics compared to its rivals, all of whom stand charged, like Tesco, of bullying farmers to lower their prices to unsustainable levels. Waitrose was the only major supermarket to come out of this accusation relatively unscathed. Other less prominent disputes have occurred in Thailand, Ireland and Hungary.

Tesco has been accused of abandoning the UK Government's planned Eco-town at Hanley Grange in Cambridge.

Tesco has been subject to several claims of apparently out-of-date food being 'back-labelled' to appear to still be in date, poor café hygiene and a staff member contracting legionnaires' disease in the Wrexham store.

Tesco has been involved in the following cases, in the areas of employment law, personal injury, intellectual property disputes, taxation amongst others.

Cases in the UK

Corporate policy

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". It however found no actual basis for accusations that Tesco could use its land bank to control nearly half of national grocery retailing, and 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.

Tesco v Walmart

Clubcard holders receve statements offering discount coupons which can be spent in-store, online or on various Tesco deals. Tesco was cited in a Wall Street Journal article as using the intelligence from the Clubcard to thwart Wal-Mart's initiatives in the UK.

Convenience stores

Tesco's 2004 Adminstore acquisition led to local and UK-wide protests. Tesco's other store openings and expansions are sometimes contested by campaign groups. When a company controls more than 25% of a business sector in the UK, it is usually blocked from buying other companies in that sector (but not from increasing its market share through organic growth). The Office of Fair Trading currently treats supermarkets and convenience stores as two distinct sectors—although this definition has been challenged by smaller retailers, including the Association of Convenience Stores.

Exploitation allegations

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, increasing and swiftly decreasing the price of a particular item back to its original value and advertising it as a 'price cut'.

Supermarkets in general have been criticised for the way "Buy one, get one free" (BOGOF) offers contribute to the billions of pounds' worth of food waste thrown away in the UK each year.

The Grocer also named ASDA as the cheapest UK supermarket (based on 33 items). Tesco was second and Sainsbury's and Morrisons joint third. Tesco price check tends to differ saying out of 7134 (compared to ASDA) products, (Survey carried out between 9 July 2007 and 11 July 2007) Tesco is cheaper: 1835 (compared to 1251 the previous week), Tesco is more expensive: 975 (compared to 984 the previous week) and Tesco is the same price: 4324 (compared to 4996 the previous week).

Kayser Bondor v Tesco Stores (Times, January 25, 1962) Tesco's first reported case, it won an injunction against a retailer who it sold goods. Tesco required that the prices sold would not be lower than a certain minimum (resale price maintenance). Granting the injunction, Cross J held that no matter how much Kayser disliked the terms, it was not compelled to enter the contract. If it did it would have to abide by the terms, unless it could convince Parliament to legislate against the practice (see now, Competition Act 1998)

Tesco in Ireland was convicted of failing to display prices properly by the National Consumer Agency in July 2008.

Suppliers

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 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 relationships 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' power of purchasing 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.

Labour relations

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 (faced with a reduced income otherwise).

American union leaders, representing 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.

Tesco Stores Ltd v Othman-Khalid (Unreported, 10 September 2001), Mr Othman-Khalid was dismissed from a Tesco petrol station. CCTV cameras had shown him serving himself, playing video games on shift and taking a pack of ten cigarettes that was damaged stock and meant to be returned to the manufacturer. At a disciplinary he lied saying that he had sold the cigarettes to a customer. He claimed that the dismissal was unfair (see unfair dismissal), and the tribunal agreed, because it said too much weight was given to the theft of the cigarettes over other factors of his job performance. The tribunal allowed the claim, but reduced his damages by 10% for contributory fault. But on appeal, Underhill QC found for Tesco that dismissal for theft, however small, was within the "reasonable range of responses" of an employer, under s.98(4) of the Employment Rights Act 1996.

Amanda Hardy v Tesco Stores Plc [2006] EWHC 3091, Judge Seymour QC dismissed a claim by Mrs Hardy that she got a back injury while trying to life some heavy bottles from the conveyer belt at the checkout. It was found her evidence was unreliable.

Tesco Stores Ltd v Wilson (No.2) (aka, Abrahams v Wilson) (Unreported, 12 January 2000), Mr Wilson was an Afro-Carribean rastafarian who worked for Barkland Cleaning Ltd, as a cleaner contracted to Tesco's site in Mereway, Northampton. Mr Abrahams, one of Tesco' security guards, was on duty in plain clothes. When Mr Wilson drove into the carpark, Mr Abrahams knocked on his window and told him to get out so he could search the car. When Mr Wilson refused, he said "you lot think you can get away with anything" and went and filed a report. Then Mr Wilson was dismissed. He claimed this was unfair, because it was discrimination under the Race Relations Act 1976. He won £5000 damages. Tesco appealed, but lost again. Judge Peter Clark held that "you lot" was certainly intended to refer to race, and that the whole defence of Tesco was meant to depict Mr Wilson as violent and dishonest. This justified an aggravated damages award.

Tesco Group of Companies (Holdings) v Hill [1977] I.R.L.R. 63, a checkout lady did not ring up 18 items worth £7 in one customer's purchase. Tesco started an investigation. She said she felt ill. Tesco called the police. They dismissed her. The Employment Appeal Tribunal held that the dismissal was unfair because she was given no opportunity to state her case when she was in a fit state.

Johnson v Tesco Stores [1976] I.R.L.R. 103, an old case under old law, the employment tribunal found Tesco to have unfairly dismissed Mr Johnson. He had wrongly stated on his application that he had a certain job between 1967 and 1973, when he had not. 18 months later Tesco found out, and they said this was the reason for dismissal. Under the Trade Union and Labour Relations Act 1974 Sch.1, para.6 , which refers to conduct during and not prior to employment, conduct prior to the start of the contract could not make the contract itself void. So Tesco was found to have dismissed Mr Johnson unfairly.

Planning infringements

In February 2006, a group of UK MPs produced a report highlighting the near monopoly 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 requested by Tesco but refused.

Substandard cement was used in the railway tunnel under thire new Gerrards Cross store .

Tesco Stores Ltd v Secretary of State for the Environment [1995] 1 W.L.R. 759; [1995] 2 All E.R. 636, deals with the Town and Country Planning Act 1990, where Tesco wanted to build a superstore outside Oxford.

Privacy

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.

Financial affiars

Taxation laws

Tesco are currently suing the The Guardian for libel and malicious falsehood over The Guardians claims that Tesco has developed a complex taxation structure involving offshore bank accounts in the tax haven of the Cayman Islands. The Guardian claimed that this arrangement would enable Tesco to avoid an estimated £1 billion tax on profits from the property sales, and also to avoid paying any tax on continuing operation of the stores, as the rate of corporation tax in the Cayman Islands is zero.

Bribary

Tesco Stores Ltd v Pook [2003] EWHC 823; [2004] I.R.L.R. 618, Mr Pook was a senior employee who got a computer company called Delta to pay his own company a "consultancy fee" (i.e. a bribe) to make sure Delta did not lose a supply contract with Tesco. Mr Pook was already serving 3 years jail for theft, and this action was for Tesco to get back that bribe money. It succeeded, because it was held that Mr Pook was in breach of trust through his conflict of interest. Moreover there was an implied term that Mr Pook would not be allowed to exercise his rights under the company ESOP, until he had paid all he owed.

Tesco Plc v Customs and Excise Commissioners [2003] EWCA Civ 1367, the Court of Appeal dismissed the claim by Tesco that it did not have to pay any VAT for transactions done under its loyalty card scheme.

Service levels

Home delivery services

A recent criticism from 2007 occurred when Tesco failed 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 similar dissatisfying experiences with Tesco's online delivery service.

Queuing times

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.

Heath and safty 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 and sold 'back-labelled' products after their use by date; falsification of temperature records; and the sale of partially cooked mince mixed with uncooked mince.

A staff member also contracted legionnaires' disease in the Wrexham store.

In adition to this 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.

Tesco's Kick drink

On the 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. A school in Worthing, Sussex banned both Kick and Red Bull over the same problem.

Tesco rejected the school's claims saying "... a normal serving contains no more caffeine than a cup of coffee. There is currently no legislation which would allow us or any other retailer to ban the sale of this or any other energy drink to children."

Its reputation has also been recently tarnished by allegations of abuse and the excessive use by young male party-goers since 2006 to apparently 'avoid becoming drunk' after taking excessive amounts of alcohol.

Alcohol

Tesco's Dorset stores have been particularly censured for selling excessively discounted alcohol products as a loss leader. Tesco has now initiated a crackdown on alcohol sales to youngsters.

Personal injury claims

Tesco Stores Ltd v Pollard [2006] EWCA Civ 393, a 13 month old child fell ill when it ate some washing powder from a product that had a faulty child resistant cap. It was bought from Tesco, but manufactured by another company. When bringing proceedings against Tesco and the manufacturer, Tesco joined the mother for negligence in not properly looking after the child. The Court of Appeal found Tesco and the manufacturer alone liable under the Consumer Protection Act 1987.

W (A Child) v Tesco Stores Ltd [2005] C.L.Y. 3097, in the St Albans County Court, a 10 year old girl won £1600 worth of damages for a nasty injury to her ear five years before. She had slipped in the supermarket.

Tesco Stores Ltd v Harrow LBC [2003] EWHC 2919, in the Harrow store, a customer found a piece of wire in a bap. The local council was found to be entitled to fine Tesco under the Food Safety Act 1990 (section s.8.).

Collins v Tesco Stores Ltd [2003] EWCA Civ 1308, the Court of Appeal (Pill LJ giving the lead judgment) agreed that Mrs Jan Collins' claim for some £24,000 for a workplace injury was statute barred. Because she had not brought the claim within 3 years of knowing the injury to be significant she was too late.

Sutton v Tesco Stores Plc (Unreported, 30 July 2002) Mrs Sutton, who was a nurse and was pregnant, slipped on a squashed tomato at the store. She won £7500 in general damages for her anxiety about the baby (who was born prematurely) and painful injury to her wrist.

Harvey v Tesco Plc [2002] 6 Q.R. 11, Mrs Harvey at age 73 slipped on the floor in Tesco and fell, injuring her hand. She had to have a plaster cast, and because of swelling her wedding ring needed to be cut off. She received £4000 in damages.

K (A Child) v Tesco Stores Ltd [2000] C.L.Y. 1670, in the Uxbridge Crown Court a seven year old won £500 damages for minor injuries at the Tesco store. An automatic door had failed to open and the child got bruising for a week, and felt quite ill the next day with a bad bump to the head.

Jacob v Tesco Stores Plc (Unreported, 19 November 1998), the Court of Appeal (Henry LJ and Clarke J) held that Mrs Jacob, a Tesco employee, was entitled to damages after a heavy fall probably from a water puddle in the store. Mrs Jacob had hurried to answer a colleague's query, and stepped in a water puddle. She quickly told someone that they should get a cleaner, hurried on 25 paces and fell. Tesco argued that the judge had not applied the leading case, Ward v Tesco Stores Ltd [1976] 1 W.L.R. 810 properly, which uses the res ipsa loquitur doctrine (i.e. if it was not the puddle, how else could it have happened). Tesco argued that there was no way the puddle could have made her slip 25 paces later, but their argument was dismissed because they could not come up with a better explanation.

Peach v Tesco Stores Plc [1998] C.L.Y. 1665, Mrs Peach, 65, slipped on a mangetout (a pea pod) in the store and really hurt her hip badly. She had to have surgery. She was recovered after 3 months but she developed deep vein thrombosis. She got £10,000 in compensation. Watford (A Minor) v Tesco Stores Ltd [1998] C.L.Y. 1672, in the Uxbridge County Court, a little boy, aged 2 at the time of the accident, won £3850 after he slipped on some crisps. He fractured bones in his leg, and it took him three months before he was fully recovered.

Kitching v Tesco Stores [1995] C.L.Y. 1731, Miss Kitching was a checkout lady, aged 22. She injured her wrist badly when she tried to stop some soft drinks falling on her. She won £5500 for this injury in the course of employment, because experienced, possibly permanently, pain up her arm and she was hindered in her hobbies of swimming and writing to pen-pals.

Corporate identity cases

Nomenclature, domain names and terminology

Tesco Stores Ltd v Elogicom Ltd 2006 EWHC 403, Tesco won a passing off action against misuse of its Internet domain name.

Weight Watchers UK Ltd v Tesco Stores Ltd 2003 EWHC 1109, Tesco fended off an action from Weight Watchers, that in using the word "points" for the fat and calorie content in its products was passing off Weight Watcher's name for its own scheme.

Secret sale of Brian Fords discount stores

In June 2008, it was revealed that Tesco had bought independent supermarket Brian Fords discount stores (with one store in Barnstaple, Devon, UK) five years previously, without notifying the public. Tesco submitted planning applications for a new supermarket early in 2008 under Brian Fords' name. The plans included a Brian Fords sign and North Devon Council were said to be unaware of the Tesco takeover. It was later revealed that a separate property company, Mixley Properties Ltd (which had zero employees and zero turnover) had actually bought the supermarket. Tesco said they were in control of Wixley Properties Ltd.

The Kick energy drink's packaging

Tesco's Kick energy drink was involved in a UK packaging design dispute during early 2007. Red Bull claimed Tesco's product's packaging was too close to that of their own product. The attempted legal challenge was resolved after Tesco decided to settle out of court for a undisclosed sum.

Signage

Sign at Tesco Extra Pool, Cornwall, advertising deserts instead of desserts.

The stores' signage displays non-standard grammar. Each store advertises (among other items) "mens magazines" [sic], "girls toys" [sic], "kids books" [sic] and "womens shoes" [sic]. At checkouts, the phrase "Dont Forget Your Clubcard" [sic] can be seen. The author Bill Bryson lambasts Tesco for apostrophe misuse in his book Troublesome Words, stating, "The mistake is inexcusable and those who make it are linguistic Neanderthals." In August 2006 Tesco released a television advertising campaign to persuade people to use fewer non-recyclable plastic carrier bags, which included the non-standard grammar "use less bags" and the related "10 items or less" express lane (see grammar article). In addition to this, many Tesco stores will have a stationary aisle rather than a stationery aisle.

Overseas cases

Cases in Ireland

Tesco Ireland is the largest food retailer in Ireland, and has over 10,000 employees. As of 2004 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%.

Speaking to business leaders in Belfast, Tesco plc CEO argued that higher prices in Northern Ireland were due to higher energy costs and the cost of transporting goods from Great Britain. Though this doesn't explain the large disparities in pricing when goods are moved by truck between the Derry (UK) branches and Letterkenny (Ireland) branches - a distance of 21 miles - for example.

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.

Tesco Ireland was convicted of failing to display prices properly by the National Consumer Agency in July 2008.

Tesco received criticism for bureaucratic and inflexible parking systems in its Bloomfield store in Dublin, Ireland.

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 .

Cases in Thailand

In Thailand, Tesco has been criticised for aggressively pursuing critics of the company. Writer and former MP Jit Siratranont is facing 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.

In Thailand another controversy arose when the Royal Thai Police alleged that Thai soldiers operating as Tesco security intimidated a rural boy into poisoning chocolates as revenge for having their contracts revoked by the company.

Tesco critic Alexander Winstone was arrested twice in Thailand for trying to blackmail Tesco, the first time he was arrested in a Bangkok red-light district for threatening to poison food in the UK in June 2007 , the second time he was arrested outside a Tesco supermarket in Pattaya in May 2008. He intended to have an accomplice in the UK inject HIV blood into beef steaks.

In a branch of Tesco near the bridge over the river Kwai, Tesco staff strip searched a young Thai girl twice claiming she was suspected of shoplifting. In a branch of Tesco near the bridge over the river Kwai, Tesco staff strip searched a young Thai girl twice claiming she was suspected of shoplifting.

Cases in Hungary

Allegations were made in the national press that Tesco's was stifling operation id some regions and using unnessasarily harsh disaplinary procedures on it's employees sine the Millennium.

Cases in the Cayman Islands

In February 2008, a six month investigation by The Guardian revealed that Tesco has developed a complex taxation structure involving offshore bank accounts in the tax haven of the Cayman Islands. The Guardian claimed that this arrangement would enable Tesco to avoid an estimated £1 billion tax on profits from the property sales, and also to avoid paying any tax on continuing operation of the stores, as the rate of corporation tax in the Cayman Islands is zero.

See also

• Tescopoly
• Ward v Tesco Stores Ltd

External links

• [7] Documents detail sale of Brian Ford's supermarket to Tesco
• Talking Tesco Tesco website arguing its ethical case.
• Tescopoly Nerve, 7 April 2006
• Supermarket Sweep Up Independent Blog.
• Tescopoly.org, Coalition of campaign groups criticizing Tesco.
• Tesco profile on Clean Up Fashion
• Tesco-Complaint Tesco Complaints website.
• Channel 4's Dispatches Documentary on The Supermarket that's eating Britain (Referring to Tesco)