Tesco Share Price: ASA Rules UK Retailer Misled Consumers

on Sep 4, 2013
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iNVEZZ.com Wednesday, September 4th: Tesco (LON:TSCO) has been criticised by the Advertising Standards Agency (ASA) for implying in an ad that the horsemeat contamination scandal from the beginning of the year affected the whole food industry.

The advertising watchdog today published its ruling concluding that Tesco’s ad has been misleading “because relatively few instances of contamination had been identified at the time the ad appeared.” The ad known as “What burgers have taught us” is now banned by the ASA.

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Tesco launched a series of national newspaper ads and an internal investigation after Ireland’s food watchdog found traces of horsemeat in burgers sold in Tesco stores back in January, leading to a steep dive in Tesco’s share price. Horse DNA was also identified in stores of Tesco rivals Iceland, Aldi and Lidl.

Tesco’s ad apologised for the incident and explained how the retailer planned to change. It also said that the problem was “about some of the ways we get meat to your dinner table. It’s about the whole food industry.”
Two complaints against the ad have been received by the ASA, one of them from an independent butcher. The complaints say that Tesco’s message was misleading, implying that the whole food industry was affected by meat standard issues, tarring suppliers not involved in the supply of mislabeled products.

The ASA’s ruling comes at a time when the UK’s biggest retailer is trying to to rebuild its reputation and market share amid problems with customer service in the wake of the horsemeat scandal. The supermarket chain recently relaunched its food range with a high profile marketing campaign called “Love
Every Mouthful”, emphasising quality rather than price. Tesco has pledged to source more meat from the UK and Ireland and step up testing to avoid future contamination.

!m[Company Criticised for Implying Horsemeat Contamination Affected the Whole Food Industry](/uploads/story/5272/thumbs/pic1_inline.jpg)
In response to the ASA’s ruling Tesco said it accepted that not everyone in the food industry had been involved in the sale of food containing horse DNA, noting that it had not named other operators. Tesco, however, emphasised that it had not operated “in a vacuum cleaner” and that systemic failings in the supply chain had resulted in the meat contamination.
A Tesco spokesman said that the retailer was disappointed by the ASA’s ruling, but accepted that the regulator had “taken a very literal view of the wording in the advert”
During today’s early session on the London Stock Exchange investors traded Tesco’s shares 0.95 percent lower.
**As of 08.25 BST buy Tesco’s shares at 369.20p.**
**As of 08.25 BST sell Tesco’s shares at 369.00p.**

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