Tesco Blocks Veg supply to Aldi and Lidl [article]

Taken from the current edition to The Farmers Journal :

Potato and vegatable growers must not supply any produce to the German discounters Aldi and Lidl from now on if they wish to remain Tesco suppliers, the Journal has learned. Meetings of growers have been told this in recent weeks by senior Tesco executive Paul Slevin.
The Tesco executive said Tesco planned to have 35% of the Irish grocery market within five years time..
He did not elaborate on how the supermaket chain intended to police it's new rule on exclusive supply. However the premises and crop records of those who supply the group are audited a number of times per year.

This smells like a restrictive practice to me.

mm

tribble

Surely this must be anti-competitive practice?

Well I would guess that Tesco would have their suppliers under a barrell with a contract with small print to allow them to bully this out of them.

It would depend of course on how Dunnes and Superquinn treat their suppliers for to guage what impact Tesco's policy would have.

The problem is, as a buyer,Tesco are larger than any other store at the moment and perhaps the suppliers cannot take the financial hit that a disagreement with them might cause.

That gives oxygen to the bullying *sigh*

mm

tribble

But if it is illigal then a contract is worthless.
I know that Tesco are powerful there must be some regulator (similar to comreg) for the food industry.

tribble

Originally posted by tribble
But if it is illigal then a contract is worthless.
tribble

Agreed but thats of little solice I would expect in the short term to suppliers as ultimately Tesco has the upper hand in that they are much of the market.
A little threat goes a long way *sigh-again*

But really why I posted this, is, apart from outrage that they would try to pull such a stunt but also to ponder, if this is what they are at in one sector, It's very likely they are at it in others aswell.

mm

sovtek

Originally posted by Man
But really why I posted this, is, apart from outrage that they would try to pull such a stunt but also to ponder, if this is what they are at in one sector, It's very likely they are at it in others aswell.

mm

Oh my yes...
I have yet to see a sector that isn't using anti-competitive practices to control the market (and rip us off). I just assumed it was taught in business classes here.

Genghis

I am actually surprised to hear that Lidl and Tesco share fruit and veg suppliers. Tesco quality and shelf life in my experience is very poor. Lidls are fresher, typically last longer than a week, and also usually have a price advantage over Tesco.

I always assumed they had different suppliers, now I am guessing that Lidl are simply faster at distributing and moving their fruit and veg than Tesco, which makes a lot of sense.