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Tesco worst of big 4 UK grocers at following supplier code - watchdog

New code of conduct study points to the challenge facing Tesco chief executive Dave Lewis
New code of conduct study points to the challenge facing Tesco chief executive Dave Lewis

Tesco has slipped to being the worst-rated of Britain's "big four" supermarkets at complying with an industry code of conduct designed to protect suppliers.

This is according to a survey commissioned by the UK's grocery watchdog. 

The Groceries Code Adjudicator (GCA) said a YouGov survey of 1,145 suppliers found that 4% of Tesco's suppliers felt the market leader never complied with the code, though that was an improvement on its 6% rating a year ago. 

The study points to the challenge facing Tesco chief executive Dave Lewis.

He is changing the firm's relationship with its suppliers in the wake of last year's £263m accounting scandal, which related to the booking of supplier payments.

In February the GCA opened a formal investigation into Tesco's relations with its suppliers, adding to inquiries by Britain's Serious Fraud Office and the Financial Reporting Council. 

Today's survey found Tesco had replaced the UK's fourth biggest supermarket group Morrisons  as Britain's worst big-four performer after the latter improved from 8% a year ago to 2% for 2015. 

The UK's second and third biggest grocers Asda and Sainsbury's both recorded 1% levels. 

Overall, smaller rival Iceland was rated the worst performer in the market, with 5%. 

Some 30% of Tesco's suppliers said the firm rarely complied with the code, an improvement on 35% in 2014. 

A spokeswoman for Tesco said the firm had undertaken a lot of work to improve its dealings with its over 3,000 UK suppliers. 

"The survey is just a snap shot. The survey does however show that suppliers have seen higher levels of improvement in our practice in the last year, compared with other retailers," she said. 

Tesco is due to publish a first-quarter trading statement on Friday. Analysts are forecasting that a tentative recovery in its key home market has stalled.