Supermarket giant Tesco faces the prospect of a Competition Authority investigation into allegations that it told suppliers it would no longer buy goods from producers who also sold to discounters Aldi and Lidl.Retailers' group RGDATA has called on the Competition Authority to investigate the claims.
According to recent reports, a senior Tesco Ireland executive told potato and vegetable growers that they should not supply produce to Aldi or Lidl if they wanted to remain Tesco suppliers. The remarks were said to have been made at a meeting of the Dublin/Meath grower group, whose members supply Tesco with fresh vegetables.
The reports stated that the UK-headquartered group was seeking 35 per cent of the Irish grocery market. The last figures available show it had 24 per cent of the market at the end of last year, making it the biggest player.
RGDATA has written to Competition Authority chairman Dr John Fingleton asking the authority to investigate the claims. The lobby group's director general, Ms Ailish Forde, said it was extremely concerned at Tesco Ireland's reported attempts to limit or control the supply of potatoes and vegetables to the retail market.
"Our members are extremely concerned that the apparent prohibition by Tesco (or its representatives) will have the effect of limiting and controlling production and access to markets," Ms Forde's letter states.
"It is also hard to see how the retailer concerned (Tesco) can claim that a refusal to supply a competitor with unbranded produce is in some way relevant or necessary to the supplier arrangement between Tesco and the growers concerned."
A spokesman for the Competition Authority said last night that it did not comment on specific complaints. However, he did say the authority was aware of the claims that a Tesco executive had warned growers that it would not buy from producers who supplied Aldi and Lidl. He said the authority was "monitoring the situation".
A statement from Tesco Ireland said the remarks attributed to the executive did not represent company policy. "We do not prevent suppliers from doing business with others, nor are we expecting a 35 per cent share of the grocery market. A 35 per cent share of the fruit and vegetable market is, however, possible," the statement said.
A Tesco Ireland spokesman told The Irish Times last night that it was clear to the company that its executive's remarks had been taken completely out of context. "We would say that this has nothing whatever to do with RGDATA's members claimed, and we would question their motivation for continuing their activities in the complaint business," he added.
RGDATA represents independent retailers and grocers, and its membership includes the BWG-controlled Spar franchise and the Musgrave-operated SuperValu and Centra franchises.
