One of Buffett's claimed keys to success is being able to evaluate management talent^. Since he can't manage all of these business himself, it's important for him to have talented managers running each show. He has specifically built Berkshire to be attractive to this kind of person. E.g., when he makes an acquisition, the old management is left in place and continues to run the business, making it a great way for someone who has built a business from scratch to cash out and yet be sure their baby won't be dismantled, unlike a normal M&A that tends to fire all of upper management and gut half the staff.

So when he says he's lost faith in management, that is quite a serious condemnation. My guess (with no data backing it up) is when Tesco ran into trouble, they tried to feed him a load of crap about it, and he knew it.

^If you have not heard the story of Mrs. Blumkin of Nebraska Furniture Mart, it is well worth it: http://www.focusinvestor.com/Blumkin.pdf