Tesco boss criticises supermarket ombudsman plans

Tesco’s chief executive, Terry Leahy, has criticised the government’s plans to introduce a watchdog to settle disputes between supermarkets and suppliers, claiming it could hurt consumers.

Terry Leahy

The competition watchdog asked the government last year to establish an ombudsman after a majority of retailers failed to agree on a voluntary arrangement.

But in an interview with the Financial Times, Leahy attacked the proposals, saying the consumer benefited from the positive level of competition between retailers.

The paper quotes him as saying: “Everyone knows supermarkets are one of the most competitive industries around. That competition puts power in the hands of the consumer,”

“An ombudsman would be there to protect suppliers but should be there to protect consumers.”

The competition commission conducted an investigation between 2006 and 2008 and found that the strength of Britain’s top four grocers – Tesco, Asda, Sainsbury’s and Morrisons – has helped to keep food prices down for shoppers.

But there are concerns the consumer could suffer if retailers squeeze suppliers to the extent that they can’t afford to invest in products or to innovate.

The plans have been criticised by the British Retail Consortium, which says it will add millions onto customers’ bills.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email customerservices@marketingweek.com

If you are looking for our Jobs site, please click here