Tesco has told its suppliers they will have to pay a new fulfilment fee when selling the grocer’s products online.

An email sent by group chief product officer Ashwin Prasad warned Tesco suppliers that they could be penalised if they don’t agree to the new charge.

The email stated: “We are writing to notify you of our intent to introduce a new fulfilment fee. We intend this fee to be applied across the whole Tesco Group, with an initial rollout to the Tesco UK and Booker businesses.

“Without introducing a supplier contribution, we would need to take additional decisions on range optimisation, differentiated price and trade plans.”

It continued to say: “Tesco shoulders the majority of fulfilment costs – whether it’s serving more than one million online orders a week or getting products to thousands of independent retailers and catering customers.”

The supermarket retailer is reported to be introducing costs to suppliers of 12p per item on branded goods and 5p for own-label products, regardless of price point.

Prasad said small businesses with a turnover of less than £250,000 would not have to pay this fee, but the company’s wholesale Booker business would be included.

Business retail consultant Ged Futter said this was an “outrageous” move and that he had received 15 calls from suppliers last week in which they all told him they would refuse the charge.

A spokesperson for Tesco commented: “Over recent years, the way we serve our customers has grown in both capacity and complexity. Our customers expect us to serve them wherever, whenever and however they want to shop.

“As we respond to changing shopping habits and our fulfilment costs continue to grow, we are talking to our suppliers about how we can work together to create a more balanced approach and ensure we can continue to invest in our customers.”

The government’s Groceries Code Adjudicator, which regulates relationships between supermarkets and suppliers, said it is seeking further information from Tesco, while encouraging suppliers to get in touch if they have concerns.

Topics