Tesco Suppliers Launch own Financial Health Checks
Suppliers of UK supermarket chain Tesco have asked audit team to review their British operations, following the company’s admission that accounting irregularities overstated its profits by £263m.
Reports suggest that Unilever, Proctor & Gamble and Coca-Cola are among the supermarket’s suppliers to have ordered a check.
Tesco’s shortfall relates to the timing of payments from its UK suppliers, which include the world’s largest food and drink manufacturers. The company believes that income from commercial deals was booked early. As a result, suppliers want to verify that their own accounts are accurate and their income and costs relate to correct periods.
Tesco is now being investigated by the Financial Conduct Authority (FCA), which is looking into the apparently complex nature of the company’s relationship with its supply chain. The firm of Deloitte, which has completed an investigation for Tesco, has passed its findings to the FCA. The Serious Fraud Office (SFO) is also monitoring the situation and Tesco has suspended eight senior executives.
A Unilever spokesperson said: “We are doing due diligence checks, as you’d rightly expect us to whenever there are external circumstances such as these.” P&G confirmed it was conducting similar investigations, while Reckitt Benckiser said: “As you would expect we have done our due diligence.”