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Tesco bid to conceal source of suppliers
Friday, 29 May 2009
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Supermarket chain Tesco tried to hide its new policy of buying directly from UK suppliers for Irish customers.
An internal report, seen by the Irish Independent, sister paper of the Belfast Telegraph, said that ensuring its policy of taking deliveries from UK suppliers went unnoticed was a key objective.
The Tesco policy document said the objective of its new policy was “to deliver an efficient value chain on key categories, that is invisible to the Irish customer and the UK Commercial team, but allows Tesco Ireland to utilise Tesco UK scale in terms of its customer offer and trading terms”.
According to the document, which was presented to suppliers, 40% of Irish consumers were “actively shopping” in Northern Ireland. The document aimed to explain changes in its policy on sourcing branded goods directly from the UK, rather than using local distributors.
Tesco’s policy has caused outrage among suppliers who claim they are facing financial ruin due to its bid to beat the competition from Northern Ireland.
The chain is engaged in a price war on the border to prevent shoppers coming North due to the devaluation of sterling against the euro. VAT is also lower in Northern Ireland, at 15% compared to 21.5%.
However, Tesco is aware of the effect of its action on Irish suppliers. An internal survey of suppliers revealed that 63% strongly believed recent changes in its trading and sourcing policy had put jobs under threat.
The document said comparisons between its prices and those in Northern Ireland had highlighted savings in excess of 40% in the North, versus the Republic.
A spokesman for SIPTU, which represents hundreds of distribution workers, said suppliers were afraid to go public about the effect of the chain’s policy, for fear of losing further business.
“Tesco obviously wants its policy to fall below the radar,” said branch organiser John Dunne.
A spokesman for Tesco said: “It is our intention to bring new lower prices to Tesco customers across Ireland.
“As part of this process of lowering prices we are sourcing centrally, internationally branded goods which were previously imported by third parties. Customers will now be able to get the same products at lower prices.
“Irish produced products will continue to be sourced in Ireland. Tesco Ireland is fully committed to supporting Irish producers.”
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How dense is the author to interpret the text “to deliver an efficient value chain on key categories, that is invisible to the Irish customer and the UK Commercial team, but allows Tesco Ireland to utilise Tesco UK scale in terms of its customer offer and trading terms”. To mean anything but buyit cheaper and don't upset the customer. Otherwise you need to assume that the policy ment to hide something from the very people that wrote it ! WHAT 15YR OLD WROTE THIS ARTICLE !!!
Posted by Dave | 30.05.09, 18:21 GMT
Yeah, Tesco should continue to sell rip off Irish produce so Irish shoppers come North! I think we should build a 500 acre free carpark on the outskirts of Newry with a free shuttle bus service to Sprucefield and Castle Court. Give us your Euro!
Posted by Stephen | 29.05.09, 22:04 GMT
I can remember shopping at Crazyprices before it was bought out by Tescos. At first they didn't change very much but slowly you notices a slow disaperance of brands and your choices started to become limited, prices started going up and a lot more junk started going on the shelfs. I still shop at Tescos but its not the only place I shop and tescos is 5 minutes walk which is the main reason for shopping there.
Posted by Rob | 29.05.09, 21:09 GMT
Is the article not about the selling of NI and other UK sourced goods in the Republic to keep ROI shopping from venturing into NI, with the exchange rate benefit??? Selling NI sourced product in the South, rather than Southern sourced product??
If so, surely this is of benefit to the NI suppliers, not those in the Republic granted. Greater market if now being retailed in the Republic, more business = more job security for NI folk.
Posted by Noel | 29.05.09, 16:58 GMT
Joe, for every 100 jobs Tesco (and other large supermarkets) create, approx 200 jobs are lost in small local businesses, as they source a lot of produce overseas, where labour is a lot cheaper. I'm not having a go, Tesco are just trying to make a buck like everyone else, it's just that they don't care who gets squashed on the way.
Posted by Brian | 29.05.09, 15:51 GMT
Why are Tesco always under attack. They've brought affordable, quality shopping to this country and employ thousands of people, (and continue to employ more and more).
Posted by Joe | 29.05.09, 12:37 GMT
Companies have no soul!
Posted by John | 29.05.09, 11:50 GMT
Where possible, we ought to be buying "local" produce. This will help local factories, industries, employers and employees. If it has "Northern Irish" produce, such as Tesco milk or minced beef for example, then buy it!
Posted by m-ickey | 29.05.09, 10:56 GMT
Ironic that people are blaming Tesco. If the public want to make a real protest, they should simply shop elsewhere.
Tesco loyalty lies directly with its share holders, if you think its elsewhere, you are being very naive.
There are plenty of other retailers available that sell 'stuff'. No point winging, vote with your purse/wallet, otherwise just accept that globalisation occasionally sucks!
Posted by StephenM | 29.05.09, 10:35 GMT