Tesco is taking The Guardian to law, accusing the newspaper of libel and malicious falsehood in articles about its tax affairs.

The supermarket giant says that The Guardian had wrongly accused it of concocting a tax structure, primarily involving offshore venture partnerships, designed to avoid paying corporation tax to the tune of up to £1bn on UK property sales.

Tesco defended its actions, describing them as a legitimate way of achieving tax savings.

The supermarket said it was not uncommon to use offshore companies for the purpose of joint ventures with third parties.

In fact, it added, Guardian Media Group had itself announced an offshore structure, as reported in The Guardian last month.

The Guardian hit back by saying that its articles were in the context of a series of articles on taxation issues in a globalised world, which clearly raised serious matters of public interest in relation to tax avoidance.

The paper said that it had never claimed Tesco had behaved illegally, but accused the supermarket of bullying tactics by deliberately seeking to chill public debate on the issue.

The Guardian said it had offered meetings to discuss the allegations, but the offer had been rejected.

Instead, it added, Tesco had taken the extraordinary step of suing for libel in a clear attempt to close down the debate.

William O'Neill, Partner at Rowlands, commented "Reputation is so important to a business. It has to be protected. This is why defamation, whether an individual or company, has to be taken very seriously."

Rowlands can advise both commercial and private clients in the area of libel and defamation and in a wide range of legal matters. Contact us for further information.