Tesco’s share price (TSCO.L) dropped on Monday as it withdrew charity Christmas cards from sale after claims they were packed using forced labour in a Chinese prison.
Florence Widdicombe, a six-year-old from London, was reported to have found a note in a new Christmas card saying it had been packed by foreign prisoners through forced labour.
The note urged the reader to contact a human rights organisation and the journalist Peter Humphreys, who was previously jailed in the Shanghai prison the note claimed to be authored from.
A spokesman for the supermarket giant said it had suspended the supplier and would “never allow” prison labour.
It came after Widdicombe’s father Ben contacted Humphreys and the story appeared in the Sunday Times. An ex-prisoner also told the newspaper inmates were forced to pack cards.
The supermarket giant slid 0.9% as trading opened on Monday before recovering slightly, and was down 0.4% at around 8.45am in London.
The message in the Christmas card reportedly read: “We are foreign prisoners in Shanghai Qingpu prison in China. Forced to work against our will. Please help us and notify human rights organisation.”
Tesco donates £300,000 a year from the sale of the cards to several leading UK charities.
A Tesco spokesman told Yahoo Finance UK: “We abhor the use of prison labour and would never allow it in our supply chain.
“We were shocked by these allegations and immediately suspended the factory where these cards are produced and launched an investigation. We have also withdrawn these cards from sale whilst we investigate."
The spokesman added that it had a “comprehensive” and regular auditing system, and said the supplier had been independently audited last month. He said no evidence of prison labour had been found.
But he added: “If a supplier breaches these rules, we will immediately and permanently de-list them.”
Tesco is understood not to have received any other complaints about messages inside Christmas cards.
Reuters reports that a Chinese foreign ministry spokesman on Monday rejected the claim prison labour was used in Tesco’s supply chain. Chinese state TV also later reported that the manager of the Chinese printing firm involved said the claims were “completely fabricated.”