Tesco is to face another investigation into its relations with suppliers, amid concerns that it breached the Groceries Supply Code of Practice. Click here to read the article.
It highlights the issue that a huge company like Tesco can have buying power over smaller suppliers. (monopsony).
This can not only mean pushing prices down, but also withholding payments to suppliers, causing cash flow problems and bankruptcy.
The article suggests that the regulation investigation will take 9 months. Not only is this a huge cost to the taxpayer, but it also means nothing can be done for the suppliers for at least this period of time, if not longer.
Is this another example of government failure as far as regulation is concerned?
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