Sainsbury's potato buyer arrested in £3m corruption probe

Buyer John Maylam was questioned by police following raids on homes and businesses in Cambridgeshire and Shropshire.

The inquiry surrounds payments allegedly made by staff at the potato producer, Greenvale, to Mr Maylam over many years.

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A second man, Greenvale operations director David Baxter, has also been arrested and questioned.

The allegations raise questions about the murky world of contract negotiations between the all-powerful buyers at the big four supermarkets and their suppliers.

The fact that Sainsbury's, Tesco, Asda and Morrisons control 70 per cent of grocery spending in the UK means suppliers are desperate to keep the buyers happy.

In the past this has routinely included wining and dining buyers, offering presents and occasional all-expenses paid trips abroad.

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However, there have also long been suspicions of under the table payments.

Farming industry insiders indicated the investigation at Sainsbury's could be just the tip of the iceberg.

Mr Maylam had a key role in deciding which firm would be awarded lucrative contracts to supply Sainsbury's with 190million kilograms of potatoes a year, worth around £130million.

In 2005, he was instrumental in cutting the number of potato suppliers from four to three.

This involved axing MBM of Cambridgeshire and handing extra business to Greenvale, which had to take on 130 new staff to cope. At the time, Mr Maylam said

the move would "improve efficiencies" and ultimately help the store to better serve customers.

In 2006, Greenvale, which also supplies Tesco, was awarded the Queen's Award for Innovation.

At the time, Mr Maylam joined the chorus of approval saying: "I am thrilledthe news comes as no surprise as we have always found them to be particularly progressive in innovation."

The City of London police are leading the investigation. Sources suggested the £3million figure relates to one year.

If the payments have been made over many years, the final sum involved could be far higher. It appears payments may have been directed through a number of intermediaries.

A police spokesman said: "Police executed and completed search warrants at two residential addresses in Cambridgeshire and Shropshire and two business premises in Shropshire.

"Two men were arrested on suspicion of corruption and money laundering and were subsequently bailed."

The investigation began after irregular payments were discovered by accountants at Produce Investments, which is Greenvale's parent company.

The company, which has operations in Shropshire, Cambridgeshire and in Berwickshire, Scotland, is understood to supply about 45 per cent of Sainsbury's potatoes. Greenvale has suspended a number of staff.

A Sainsbury's spokesman said: "We can confirm that allegations have been made concerning certain payments and benefits by a supplier to an individual employed by us.

"Following inquiries, we have passed our findings to the police for further investigation."

Mr Maylam has been a highly influential and respected figure at Sainsbury's.

The company has often used him to front news of any fresh produce innovations.