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Sainsbury’s, the supermarket group, was this weekend embroiled in a £3m bribes investigation after one of its most senior buyers was arrested on suspicion of accepting backhanders from a potato supplier.
John Maylam, who has worked for the supermarket for more than a decade, was arrested last week over receiving irregular payments from Greenvale, which supplies nearly half of the chain’s potatoes.
City of London police said two people had been arrested on suspicion of corruption and money laundering. Residential and business premises have been searched in Shropshire and Cambridgeshire.
A Sainsbury’s source said: “We are the victims of an alleged crime and take it very seriously.
None of the payments went through our system and we believe this was limited to the one supplier.”
Maylam has for years been one of the supermarket’s most respected buyers. He is regularly used as an expert commentator by the company and has been quoted in the media talking about Jamie Oliver’s positive impact on vegetable sales.
Britain’s £1 billion potato market is described as “cutthroat” and there is said to be overcapacity in the processing and packing plants that supply the supermarkets.
“There are only about 10 main players but they are chasing too little business,” said one industry source. “They can’t afford to lose supermarket business.”
The allegations once again put the spotlight on the supermarkets’ dealings with suppliers. The supermarkets have been repeatedly accused of putting farmers out of business by driving down prices and making unfair demands. If the allegations of bribes are proven, it will raise questions over whether there have been any other illegal payments made or offered by supermarket suppliers.
James Lowman, chief executive of the Association of Convenience Stores, said: “We don’t know if this is a one-off or the tip of the iceberg but supermarkets’ relationships with their suppliers should now be opened up. There are kickbacks all through the process which are considered lawful.” Sainsbury’s said it was not aware of any previous allegations about possible illegal payments.
Greenvale, which also supplies Tesco, has potato packing operations in Shropshire, Cambridgeshire and the Scottish borders. Its turnover was £139.7m in 2005-6, but it lost £4.2m. The company, which has received the Queen’s award for innovation, is understood to supply about 45% of Sainsbury’s potatoes. The irregular payments – believed to be up to £3m – are understood to have been discovered by Produce Investments, Greenvale’s parent company.
Sainsbury’s was alerted and Maylam and David Baxter, Greenvale’s operations director, were arrested on Thursday and then released on bail.
Sainsbury’s said it had rigorous rules for its buyers and had referred the matter to police. Produce Investments said it had brought the matter to the attention of Sainsbury’s.
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everyone should get over it and give the guy a brake- if u could get rich doin that then u would!
Rachel, Dubai, U.A.E
As an ex-employee of Sainsbury's this saddens me. All the other people I have worked with in the company had the highest possible professional integrity, it is a shame to read that one person may have damaged the companys' reputation.
Fiona Ellis, Leeds, West Yorkshire
Looks like they've had their chips then...
Mike Jones, Farnborough, Hampshire
It will be interesting to see how far the investigation goes. The supermarkets have colluded to keep prices paid to growers below what a true market would produce for many years all done with tacit support from regulatory authorities. Business practices that verge on fraud have become accepted as the norm making this step into obvious illegaility inevitable. I am absolutely certain that this represents one of many similar deals and hope that Greenvale as a company are not used as a scapegoat for actions that reflect the world created by Sainsbury and others.
Jim, Norwich, UK
Some people are missing the point here. The supermarket, Sainsburys are the vicim of alleged fraud here, by one of their own staff taking 'bungs' for personal gain..
sue Maxwell, Aylesbury, UK
Probably got his eye on the commons, just getting in a little practice.
preddo53, leeds, UK
Not surprised since the whole supermarket industry is corrupt from top to bottom by seeking to enhance its own profits by ennsuring that its suppliers pay to all in the chain to get a listing and supply agreement. If a supplier wishes to be accepted not only must he pay these fees, plus advertising, in -store promotion, fees to local stores, encuoragement to shelf fillers he must also ensure that he pays the buyer.
PS It is not the only industry. Talk to the buyers on low-cost fashion and ask them how much the suppliers in India and China are paying into their HK bank accounts.
Patrick, Taipei, Taiwan
Certainly a hot potato for sainsbury's. But as their biggest competitor would say..."Every little helps"
Rob, Rickmansworth, Herts
Flavour of vegetables is a matter of personal taste, and of course this cannot be legislated for - so the EU has listed varities that have no taste at all - solution !
Wills, Southampton, Uk
With the coming global food shortages, we'll soon all be 'digging for victory' with spuds replacing the lawn.
Colin Soames, London,
Regardless of where bought potatoes should be stamped with the 'variety' of the potato. It would cost very little as they have to stamp the growers number anyway.
David Vinter, Louth, Lincs. , UK.
is anyone really surprised?
Ronnie , scotland, scotland
He must have been sitting at the back of the MP's and MEP's class on "How to get rich quick"!
Rod Garr, Miami, USA
Ah! It all becomes clear now why I haven't had decent potatoes recently. I managed to buy some Kerrs pinks (Scottish potatoes) from -shock horror-Tesco recently. They came at a premium price for a small bag but were much admired for taste and texture.
I am now on a hunt for another supplier of decent potatoes.
una, derby, uk
Now they ARE a blue chip company
Ken Wyatt, Todmorden, UK
White potatoes, Red potatoes. What are they and why do wthey have no taste. Why do supermarkets sell "Salad Potatoes" which they do would not label as New Potatoes because they have been stored in artifical claimatic conditions for up to a year. I have tried to find alternative and tasty potoates even in farm shops and the usual reply is "Dunno. Got Red and White though". I can get decent potatoes when shopping in other countries of Europe.
Romans Seja, Leicester,
Does this explain why I have accidentally bought tasteless, mushy Romano potatoes, labelled by Sainsbury's as Desiree (and why I now try not to buy potatoes at Sainsbury's at all)?
Gill, Southampton, UK
One potato, two potato, three potato.....
One for you and one for me.....oops.....
pazz, London, UK