Tesco: Every billion helps

SUPERMARKET GIANT Tesco declared profits for 2008-09 of Ł3.1 billion, an all-time record for a UK retailer and 10% up on the company's previous year's profit.

The retailer now controls around one-third of the UK's entire grocery market. And Tesco's profits are greater than the Gross Domestic Product (GDP - the sum total of a country's output of goods and services) of 33 countries!

Tesco boss Sir Terry Leahy talks about Tesco being a 'socially responsible corporation'. This is so much hogwash. Its 'corporate responsibility' is to ensuring its major shareholders receive fat dividends.

Tesco's profits and its market share gives the company enormous economic muscle. This enables it to control its supply chain, forcing smaller producers, especially farmers in the UK and abroad, to charge Tesco lower prices.

The squeezing of small producers has forced many farmers out of business as well as closing thousands of small independent stores who are unable to compete with Tesco's economies of scale. The welfare of its chickens also came under the spotlight after a campaign by TV cook Hugh Fearnley-Whittingstall.

Local planning decisions are steamrollered through by Tesco, with councils fearful of losing local jobs if they rule against the location of a new supermarket.

Tesco claim to be helping the environment by cutting energy use in their stores by 50% by 2010. But this claim is offset by their expansion plans.

Tesco came under fire in June 2008 for their use of an Indian textile factory in Bangalore that paid workers just 16p an hour (for a 54 hour, six day week) to make their clothes.

This followed an earlier report from the charity War on Want in December 2006, which found that workers in Bangladesh were regularly working 80 hours a week for just 5p an hour, in what was described as "potential death trap factories", to produce cheap clothes for UK retailers, including Tesco.

Tesco's Fresh and Easy stores franchise in the USA has also come under fire after it refused to recognise the United Food & Commercial Workers Union in its stores. This even prompted the then presidential hopeful candidate Barack Obama in June 2008 to write to Tesco urging the company to engage with the union.

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In The Socialist 22 April 2009:

Fight the cuts!