An influential MP says Tesco’s (LON:TSCO) boss has ‘some explaining to do’ about why the company did not reveal its inspectors had unearthed ‘major’ process issues at a factory, the Guardian has reported. The comments are a blow for the blue-chip grocer which is potentially facing a legal challenge over its fake farm branding.
Tesco’s share price has been steady in today’s session, having climbed 0.29 percent to 208.10p, marginally outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.02 percent higher at 7,605.16 points. The supermarket’s shares have added more than two percent to their value over the past year, as compared with an over seven-percent rise in the Footsie.
The Guardian reported yesterday that John Grogan, a Labour member of the environment food and rural affairs committee, had said that Tesco’s chief executive Dave Lewis had “some explaining to do” why Britain’s biggest grocer did not reveal its inspectors had unearthed ‘major’ process issues at a second 2 Sisters Food Group factory. The newspaper notes that the company had conducted a series of emergency inspections of 2 Sisters poultry factories as a direct response to a Guardian and ITV undercover investigation into its West Bromwich site at the end of September.
It was subsequently revealed that 2 Sisters’ Coupar Angus site in Scotland had received what the grocer described as a ‘red’ warning rating because of process issues identified during one of those inspections, while production was being suspended at the chicken processor’s West Bromwich plant.
“Why did Tesco not provide this information, not just to the public but to the Food Standards Agency? All supermarkets should definitely do this in the future,” Grogan pointed out.
The newspaper quoted Tesco as saying that it was working closely with the regulator and had shared “the key findings from our inspections at 2 Sisters Food Group with the FSA”.
Analysts on Tesco
The 15 analysts offering 12-month price targets for Tesco for the Financial Times have a median target of 210.00p, with a high estimate of 270.00p and a low estimate of 165.00p. As of December 20, the consensus forecast amongst 21 polled investment analysts covering the blue-chip supermarket advises investors to hold their position in the company.