Tesco, a prominent supermarket chain in Britain, is making news recently because of the huge rebates the company receives from suppliers. These rebates usually come in two forms: as slotting fees and as marketing or distribution fees. The suppliers give it for getting a good place on Tesco’s shelves. But the burden of these rebates falls on consumers, which prompted many countries, including Poland, to ban them.

The supermarkets generally ask for such rebates because of rising competition in the market from cheaper brands and retailers. Tesco was also facing stiff competition, which led to declining profits and property value of the supermarket chain.

In order to tackle the problem, Tesco first decided to cut thousands of jobs and reduce the perks of executives. In December 2014, the company decided to sell off its corporate jets that were used by executives. Another decision that was taken to compete in the market was to increase supplier rebates. But this is being criticized by consumers because the burden of rebates is ultimately put on them. In response, Tesco has declared that it will reduce rebates from 24 types to just 3 by 2017.