grocery regulations compliance policy - our tesco€¦ · 2. the obligation of tesco ireland to...

GROCERY REGULATIONS

COMPLIANCE POLICY

TESCO ROI Policy

August 2019

GROCERY REGULATIONS COMPLIANCE POLICY

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Why it matters The Grocery Regulations are about dealing fairly and transparently with suppliers and many of the behaviours it requires are the same as those defined in our Leadership Skills and our Tesco Values. Getting it wrong is bad for us, our suppliers and our customers and sanctions are significant including fines up to €100,000 and potentially imprisonment. This Grocery Regulations Compliance Policy is designed to ensure that we:

• work collaboratively and build great relationships with our suppliers;

• deliver the very best value for our customers; and

• are seen as a company which is fair, honest, knowledgeable and helpful.

Purpose of Policy

This Policy sets out:

1. our minimum expectations for complying with the Grocery Regulations. All colleagues employed by Tesco Ireland who are involved in the supply of

groceries for resale to the Irish market must comply with this Policy; and

2. the obligation of Tesco Ireland to implement a Grocery Regulations Compliance Programme.

This policy excludes other legislation, e.g. Competition Act and the UK’s GSCOP, as these are covered elsewhere in separate policies and should be read in

conjunction with the Ethics and Compliance Blueprint. It also excludes any other voluntary codes by which Tesco is bound eg the EU Supply Chain Initiative.


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Grocery Regulations Key Principles The Grocery Regulations apply to all supplier relationships where Grocery Goods are purchased for sale in Ireland: this is regardless of where in the world

the products are sourced.

The Grocery Regulations contain some key principles which lay down the way in which we must go about complying with our obligations. These are:

1. We deal fairly and lawfully with our suppliers

2. We have a written contract with each supplier

3. We pay our suppliers on time

4. Will only pass charges to suppliers where we can evidence their prior agreement

5. Our buyers complete mandatory new starter and refresher training

6. We monitor and report, internally and externally, our compliance with the Grocery Regulations

We abide by the specific rules contained in the Grocery Regulations (and the Guidelines to them) as laid out in the Risk Assessment at Annex 1. Copies of the

Grocery Regulations and the Guidelines are included at Annex 2 and are also available on the Grocery Regulations Sharepoint. Any complaint from a supplier

alleging a breach of the Grocery Regulations must be reported to Legal immediately and logged in the format on the tracker at Annex 3.

In the event that a supplier raises a complaint which suggests a breach of the Grocery Regulations, whether or not the supplier has specifically cited them,

we record it on the disputes tracker at Annex 3 and proactively seek to resolve it. It is not enough to simply ignore the complaint, even if it is obvious that

the complaint was raised in error or was a mistake made and then rectified by Tesco. Further information and support is available from Legal.

https://tesco.sharepoint.com/teams/GroceryRegs/SitePages/Home.aspx


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Grocery Regulations Compliance Programme Legal own the Grocery Regulations Compliance Programme and compliance with it will be reported to the Compliance Committee at least once each year.

The CEO is accountable for ensuring that the Grocery Regulations Compliance Programme is followed and that colleagues understand and follow these

principles in their day to day activities.

The minimum expectation is that the programme comprises:

A. GOVERNANCE & LEADERSHIP: Leadership team sets the “tone from the top” and leads by example

B. RISK ASSESSMENT: The nature and extent of Grocery Regulations risks are assessed

C. POLICIES: The policy is adopted, is easily accessible and that it is followed by all colleagues

D. GUIDELINES & PROCEDURES: Clear guidelines that give more detailed information and set out practical processes should be developed, made easily

accessible and followed by all colleagues

E. TRAINING & COMMUNICATION: All new colleagues are provided with a copy of the Grocery Regulations during their first week, mandatory new starter

training for all relevant colleagues within one month of joining Tesco or taking up a new role and mandatory refresher training for all at-risk colleagues

each calendar year. In addition, ad-hoc training, guidance or assessments (for example in the form of a PiP) should be provided whenever a risk is

identified or where required by the regulator.

F. INVESTIGATIONS & SANCTIONS: Clear escalation processes are in place to manage breaches (or suspected breaches) of the Grocery Regulations or Tesco

policies and appropriate action is taken whenever a breach of the Grocery Regulations or a Tesco policy is identified.

G. MONITORING & REVIEW: The Programme is reviewed by Legal at least once each year to ensure it is effective and is reported to the compliance committee

at least annually. The compliance with Grocery Regulations of individual buyers is measured as part of the corporate performance review process


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This Compliance Policy, together with the Programme that supports compliance must be reviewed annually and specifically following the publication by the

Regulator of any new guidance.

Breaches

It is important that any colleague who suspects that the Grocery Regulations or this Policy might have been breached speaks up straight away.

Breaches, whether confirmed or suspected, raised internally or by suppliers, must be reported as soon as possible, and in any event within 48 hours, to both

Legal and your line manager. If you feel unable to raise the issue with your line manager or Legal, you should contact Protector Line:

[email protected] / 1800 567014.

Breaches of the Grocery Regulations are, by definition, also a breach of the Tesco Code of Business Conduct, so the Corporate Breach Reporting Process

must be followed.

Failure to comply with this policy may result in disciplinary action being taken against any colleagues concerned or the termination of contracts with

contractors working for Tesco.

mailto:[email protected]


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Contact

If you have any questions on how this Policy or related guidance applies or should be implemented, or if you have any other Grocery Regulations related

query (including if you receive any contact from regulators), please contact:

Úna Ní Mhurchu (Inhouse Counsel and Grocery Regulations Liaison Officer):

+353 1 215 82835 or [email protected]

Catherine Collins (Legal Counsel):


Sarah Gallagher (Legal Director):


A copy of this policy and the Grocery Regulations Compliance Programme is available on the Grocery Regulations Sharepoint



https://tesco.sharepoint.com/teams/GroceryRegs/SitePages/Home.aspx


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Annex 1: Risk Assessment Tracker/RACI

A template for identifying and assessing risks faced by the business (i.e. Grocery Regulations risks that are material to the business) is shown below. This Risk

Assessment Matrix should be reviewed regularly to ensure that it reflects any additional exposure for the business following publication by the Regulator of

clarification and/or guidance.

Management of risk is supported primarily by ongoing monitoring activity which is carried out by the Risk and Compliance Manager. In addition, investigations

conducted by Internal Audit and the monitoring of complaints and alleged breaches within the Group Legal team will identify areas of concern which may

arise from time to time.

The focus of monitoring and auditing work should focus on issues that the Regulator may identify from time to time together with issues raised separately by

colleagues or suppliers.


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No. Grocery Regulations Obligation

Compliance Risk How we manage the Risk

Responsible Accountable

1 Regulation 4 Grocery Goods Contract

We do not have a written contract in place with our Supplier.

• Active Supplier list in place and maintained

• Signed T&Cs required as part of supplier set-up

• All Deals & Charges agreed via D&C webform

• Buyers follow document storage protocol

• Buyer Training

Richard Wood (Category Director) John Brennan & Richard Wood (Category Directors)

Joe Manning (Commercial Director)

The Contract is not expressed in clear understandable language.

• Proforma contract subject to regular legal review

Úna Ní Mhurchu (Inhouse Counsel & Grocery Regs Liaison Officer)

Sarah Gallagher (Legal Director)

The Contract is not signed by both parties.




The Contract is not retained by both parties.

• Document Repository


• Buyer Training



2 Regulation 5 Variation Termination or Renewal of

Our written Contract does not expressly entitle us to vary, terminate or renew our Contract.

• Proforma contract subject to regular legal review




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Grocery Goods Contracts

We do not comply with our Contractual requirements to vary, terminate or renew.


• All Deals & Charges agreed via D&C webform


• Buyer Training

• Regular Audit/Compliance Monitoring



We do not provide “reasonable” notice to vary, terminate or renew having regard to all of the circumstances including duration of Contract, frequency of orders, characteristics of grocery goods (including durability, seasonality and external factors affecting their production) and for significant variation, the value of any order so affected or delivery arrangements relative to the annual turnover of the supplier.1

• Buyer Training

• Grocery Regulations Buyer Toolkit

• Legal Review


Richard Wood (Category Director) Úna Ní Mhurchu (Inhouse Counsel & Grocery Regs Liaison Officer)

Joe Manning (Commercial Director) Sarah Gallagher (Legal Director)

3 Regulation 6 Goods or Services from Third Parties

We compel a supplier to obtain goods or services from a third party from whom we received payment for the arrangement except where the suppliers’ alternative fails to meet

• Training


• Pro-forma comms to suppliers

• Legal Review

Richard Wood (Category Director) Úna Ní Mhurchu (Inhouse Counsel &


1 Variation includes variation of the frequency, timing or volume of the supplier delivery of grocery goods


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reasonable quality standards or is more expensive.


Grocery Regs Liaison Officer)


4 Regulation 7 Non-performance due to factors beyond reasonable control of parties to Contract

We seek to make a supplier liable for delays or failure to perform resulting from circumstances beyond the supplier’s reasonable control.

• T&Cs expressly cover this issue (Clause 21)

• Buyer Training

Richard Wood (Category Director) Úna Ní Mhurchu (Inhouse Counsel & Grocery Regs Liaison Officer)

Joe Manning (Commercial Director) Sarah Gallagher (Legal Director)

5 Regulation 8 Forecasts of the supply of grocery goods

Despite a request from a supplier, we fail to prepare in good faith and with due skill, care and diligence a forecast of grocery goods.

• Buyer & Supply Chain Training

• Online forecasting platform accessible by suppliers via Tesco Connect

Barry Davies (Head of Supply Chain)


We fail to provide a forecast of grocery goods required by us in respect of a specified period where one has been requested by a supplier.





The forecast provided to the supplier is prepared without consultation with the supplier as to the basis of its preparation.





The forecast is not prepared in good faith and with due skill, care and diligence.






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The forecast is provided without confirmation in writing of the basis upon which it was prepared.





6 Regulation 9 Payment from Supplier as a Condition of stocking, displaying or listing2

Our charges to a supplier for stocking, displaying or listing its grocery goods are not based on an objective and reasonable estimate of the costs to us.

• Master Schedule of Deals & Charges addresses this and is kept under regular review

• Deals & Charges Webform


• Buyer Training


[Richard Wood (Category Director) John Brennan & Richard Wood (Category Directors)


We seek to levy the charge in respect of grocery goods which are not new to store (that is in the case of a single store, they must not have been supplied in the previous year or in the case of multiple stores, they must not have been stocked in a least 25% of those stores in the previous year).




• Buyer Training




We fail to provide a supplier with an estimate of the costs of stocking, displaying or listing grocery goods upon its request.




• Buyer Training



2 Note Regulation 9 does not apply to payments made in respect of a promotion.


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The estimate does not set out the basis upon which the estimate has been prepared.




• Buyer Training



7l Regulation 10 Payment Terms and Conditions

We fail to agree payment terms with our supplier in writing.

• Payment Terms Policy in place and communicated to our supply base

• Written acceptance of Payment Terms for each supplier

Brian Houlihan (Commercial/Marketing Finance Manager)

Scott Fitzgerald (Finance Director)

We fail to meet those payment terms (i.e. we pay late)

• We are clear what constitutes a “late payment” and what is a valid dispute

• We have a clear process to deal with both appropriately and quickly

• Invoice Query Team (Zendesk)

• Buyer Training

• Clear Complaints Process




We agree payment terms in excess of 60 days in breach of the late payment regulation.

• Payment Terms Policy does not exceed 60 days



8 Regulation 11 Promotions

We seek payment or an allowance from a supplier in respect of a promotion where our Contract does not expressly provide for this.

• T&Cs expressly cover this (Annex)


• Master Schedule of Deals & Charges

Richard Wood (Category Director)



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• Buyer Training


• Promotions Nomination Form


John Brennan & Richard Wood (Category Directors)

We run a promotion without providing the supplier with the requisite notice specifying the duration, frequency, quantity and basis for such quantity.



• Buyer Training






We fail to provide the supplier with an estimate of cost of the promotion (and the basis of that estimate) upon request.



• Buyer Training






9 Regulation 123 Payment for Marketing Costs

We seek payment for marketing costs in circumstances where our contract does not entitle us to.






3 Regulation 12 does not apply in respect of a promotion.


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The payment is not based on an objective and reasonable estimate of the marketing costs.



• Buyer Training





We fail to provide an estimate of the marketing costs (on the basis upon which the estimate has been prepared) upon request.



• Buyer Training





10 Regulation 134 Payment for retention, increased allocation or better positioning of shelf space

We seek payment or an allowance for shelf space where that is not provided in our Contract.




• Buyer Training





11 Regulation 145 Payment for advertising or display of grocery goods

We compel a supplier to make a payment (or grant an allowance) for the



• Buyer Training


Richard Wood (Category Director)

Joe Manning (Commercial Director) Ruairi Twomey

4 Regulation 13 does not apply in respect of a promotion. 5 Regulation 14 does not apply in respect of a promotion.


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advertising or display of its grocery goods in our premises.6


John Brennan & Richard Wood (Category Directors) Suzanne Quinn (Marketing Manager)

(Marketing Director)

12 Regulation 15 Payment for Wastage

We charge for wastage in circumstances where that is not provided for in our Contract.







We fail to provide the supplier with an estimate of the wastage costs (and basis upon which the estimate has been prepared) upon supplier request.




• Buyer Training





13 Regulation 16 Payment for Shrinkage

We seek to charge a supplier for shrinkage where our Contract does not entitle us to do so.







6 We sell in store (security barriers, trolley advertising, Gondola end header POS, Power Aisle POS, In Aisle POS relating to value [offer], NPD or seasons, sampling of supplier products) and out of store (leaflet, magazine, digital via GHS, Co-branded/funded TVC’s, Co-branded websites (e.g. Baby Club), Clubcard mailing insertions) advertising predominantly via Dunnhumby (approx. 95%) but also via commercial.


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The shrinkage charge is not based on an objective and reasonable estimate of the cost of shrinkage to us.




• Buyer Training





We fail to provide a supplier with our estimate of the cost of shrinkage (on the basis for that estimate) upon request.




• Buyer Training





14 Regulation 17 Designation and Training of Staff

We fail to designate and train appropriate members of our staff to be responsible for:

(i) compliance with the regulations and;

(ii) dissemination of information relating to the implementation of the regulations to other staff;

• Role profiles reflect Grocery Regulations requirement

• We identify those in scope for training and those in scope for dissemination at least once annually and record that

• We train those in scope at least once annually

• We develop and maintain e-learning module

• New Starter/Mover Training Process

• We retain evidence of the above for review

Úna Ní Mhurchu (Inhouse Counsel & Grocery Regs Liaison Officer) Mark Butler (Training Manager)

Sarah Gallagher (Legal Director) Geraldine Casey (HR Director)


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We fail to nominate a suitably qualified staff member to liaise with the Regulator in relation to the regulations (a Liaison Officer).

• We maintain the Liaison Officer role

• We ensure it is visible to the business and externally

• We ensure it is appropriately resourced/staffed (eg. deputy/generic email address)



We fail to confirm the nomination of a Liaison Officer to the Regulator.

• Annual letter to the Regulator confirming nomination or changes



15 Regulation 18 Annual Compliance Report

We fail to submit an Annual Compliance Report by 31st March each year detailing our compliance with the regulations.

• Obligation forms part of our overall Plan for Compliance and is managed through the Compliance Committee



The Annual Compliance Report is not appropriately signed by a Company Director.




The Annual Compliance Report does not contain the prescribed information.





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16 Regulation 19 Maintenance of Records7

We fail to retain the prescribed documents for a period of 6 years after the end of the financial year in relation to which the documents relate.

• Document Storage Roadmap (what is stored where)

• Single Document repository

• Webform

• Training

• Office Document Retention Policy and Procedure


Richard Wood (Category Director) Brian Houlihan (Commercial/Marketing Finance Manager) Úna Ní Mhurchu (Inhouse Counsel & Grocery Regs Liaison Officer) Barry Davies (Head of Supply Chain) Suzanne Quinn (Marketing Manager)

Joe Manning (Commercial Director) Scott Fitzgerald (Finance Director) Sarah Gallagher (Legal Director) Barry Davies (Head of Supply Chain) Ruairi Twomey (Marketing Director)

7 Prescribed documents are Contracts, records of payments made by us to suppliers and by suppliers to us (including invoices, receipts, rebates, discounts, bank

statements, electronic fund transfers and cheques), records of forecasts and estimates required to be provided under the regulations, names and addresses of each supplier, records of training and dissemination of information, records of the Board of Directors, records used in the preparation and submission of the Annual Compliance Report.


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Annex 2: Grocery Regulations & Guidelines

Consumer

Protection Act 2007 (Grocery Goods Undertakings) Regulations 2016.pdf

Guidelines.pdf


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Annex 3: Query Tracker

INFORMATION ON QUERIES RAISED BY SUPPLIERS AND HOW THEY WERE RESOLVED

8 This will be the later of (1) the date on which matter confirmed as resolved or (2) the date on which the supplier receives any payment made.

Summary of the issue/ actual breach

(including supplier name, whether written or

verbal allegation; products involved and whether

branded or own-label ; brief outline of facts.)

Regulation at

issue

Details of outcome

(e.g. within or outside

scope of Grocery

Regulations or withdrawn

by supplier)

Action taken by retailer to rectify

issue and avoid a recurrence

Level query

started at

(and date)

Level query

resolved at

(and date)8

Category &

Product

contacts;

lawyer

advising

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