Unethical trade practices of Tesco on fresh produce from developing Essay

Unethical trade practices of Tesco on fresh produce from developing countries - Essay Example This research will begin with the statement that the impact of unethical practices of business especially conducted by multinational corporations has long been the center of debates. Multinational companies operating in developing countries in the complex supply chain and the increased international trades, their business activities and decisions can have a profound impact on local communities and people from developing countries, which are producers in the supply chain. According to the ILO, agriculture is the largest sector of employment in most developing countries, which employs one-third of the world’s labor force. Many families and people rely on agricultural and production for export for their livelihoods. Agricultural supply chains are complex and international. However, it is considered a vulnerable sector for its high production cost, price fluctuations, and the unbalanced market power. In the complex supply chain, multinational companies that purchase their products from developing countries can have immense impacts on people living in those countries. In the international market, actions taken by the dominant buyers and retailers may create a situation where it undermines the capacity of suppliers and compromises farmers and worker’s basic rights. According to Wearden, the United Kingdom imports over 90 percent of its fresh fruits and 60% vegetables from other countries each year. These products are imported mainly from European countries and some developing African countries such as Kenya and Morocco and have estimated value of GBP 1.5 billion per annum. In the UK, a small number of retailers dominate the food retail market a factor which is seen to in turn generally contribute to the power imbalance in the trading relationship between purchasers and suppliers. According to the UK Competition Commission, supermarket chains are increasingly exerting pressure on suppliers and farmers from developing countries to conform to ethical stand ards. Tesco PLC is the grocery market leader in the United Kingdom with a market share of around 30 percent in 2013. It is one of the world’s largest merchandise retailers. TESCO was founded by Jack Cohen in 1919 as a group of grocery stalls in East End of London. In forming the name TESCO, the first two letter of Jack Cohen’s his surname were combined with the initials of his tea supplier, Thomas Edward Stockwell. The first Tesco store was opened in Middlesex in 1229. Originally Tesco focused its business on grocery retailer until the early 1990s when it diversified its products and services into a wider range inclusive of items such as clothing, furniture, books, DVD rental electronics, financial services, internet services and software in addition to its expanding its business abroad. Since then Tesco has continued to grow and offers new services in addition to opening new stores globally with a principle to sell a wide range of quality products at lower prices for everyone. In the present, Tesco has more than 6,500 stores worldwide and employs over 500,000 staffs around the world. Tesco is considered to be Britain’s biggest and most profitable supermarket chain and is currently seen to be expanding globally at a rapid rate. In 2013, Tesco announced its group trading profit before tax at GBP 3.5 billion with the UK sales accounting for over GBP 2 billion. With its aggressive worldwide expansions, Tesco purchases its products from suppliers in over 70 countries around the world. Given its continual success and the highest market share in the UK retails market, Tesco is in a powerful position, especially in grocery supply chain.