Tesco buyers backtrack on new fulfillment fee requests

Tesco buyers are understood to be backtracking after facing criticism from suppliers over controversial plans to introduce a new supplier fulfillment fee.

The UK’s largest retailer is attempting to soften earlier threats that suppliers could face range reviews for non-compliance, as reported by The Grocer.

Earlier this month, Tesco wrote to suppliers of its intent to introduce new fees to help cover the growing costs of operating online. Suppliers and farmers then warned that the new fees could risk the survival of their businesses.

It later promised that none of its suppliers would be delisted if they refused to agree to the new fees.

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“At Tesco buyer level there has been an awful lot of backtracking going on,” Sentinel Management Consultants chief executive David Sables told The Grocer.

“There have been plenty of buyers trying to duck out of conversations or saying I’ll refer your concerns to senior management.”

Another source said: “From what I’ve picked up from suppliers, Tesco’s buyers have been stressing that to them, margin is more important than securing this new fee.

“That adds to the theory that this was a way for them to start a conversation, an opening gambit, not the end game.”

Earlier this month, The Groceries Code Adjudicator (GCA) launched a probe into the supermarket’s new policy over concerns it breaches the Groceries Supply Code of Practice – following heavy criticism from a large number of parties.