Tesco suppliers hit by extra costs over driver shortages

Tesco is set to impose extra costs on suppliers with “zero consultation”, claiming its hand has been forced by a shortage of HGV drivers.

The 14 per cent surcharge will be applied to the supermarket’s primary distribution rates, which it bills suppliers for contracting haulage companies to collect their goods.

It is thought to have been a response to delivery firms raising their prices to cover the growing cost of lorry drivers.

The news comes as the government revealed it would extend drivers’ hours from July 12 to prevent food shortages.

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The surcharge will be in place from August 1 until the end of the year, although the Big 4 grocer confirmed it would review the rate in October.

Some suppliers were alarmed by the price hike, with one source claiming there was “zero consultation” over the change.

Sentinel Management Consultants commercial director Henry Chambers told The Grocer that Tesco was “sailing pretty close to the wind” on government regulations by failing to discuss its move .

Last month, groceries code adjudicator Mark White warned that retailers had forced 190 suppliers to bear additional costs in 2020.

However, the former chief executive of logistics company Fowler Welch, Nick Hay, was “buoyed” by Tesco taking the driver shortage seriously.

“At times retailers will try and hold off on accepting there’s a problem and pursue other alternatives before they accept there needs to be an increase in costs,” he said.

“I think it’s very positive that there’s a realism about this issue.”

“We are doing everything we can to manage the current challenges facing the logistics industry and ensure our customers are able to get the products they need,” a Tesco spokesperson said.

They added that the price rise “went through an independent process to agree rates that are competitive for the market”.

Although the government hopes extending driver hours will ease pressure on the grocery sector, it has faced criticism from some quarters.

“Asking an already exhausted workforce to work even longer is likely to make an already difficult situation worse,” Unite transport officer Adrian Jones complained.

However, the move is in line with guidance from supermarket and trade association bosses in June.



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