Tesco has been accused of squeezing suppliers in an attempt to gain £100m before new regulatory powers come into force next month.
Retail analyst Cantor Fitzgerald has claimed in a note that the grocer is attempting to maintain profit margins by demanding discounts from suppliers.
The new Groceries Code Adjudicator Christine Tacon’s powers come into force next month as she attempts to stamp out malpractice in the food supply chain.
Cantor Fitzgerald analyst Mike Dennis said Tesco had contacted hundreds of suppliers to demand discounts on contracts that are typically paid 60 days in arrears.
Dennis said Tesco suppliers, aside from those delivering Christmas products, had come under pressure from Tesco.
He said: “It is our view that Tesco has again overstepped the mark and the situation is very difficult for many suppliers.
“It seems Tesco’s stable UK margin stance is illogical and unsustainable and cannot just be maintained at the expense of sales, European profits and other operations.”
Tesco said in fact it was general merchandise that was holding back sales growth but improving margins, The Telegraph reported.
However, Dennis said he had accounted for general merchandise and seen letters from Tesco to suppliers demanding discounts.