John Maylam, 44, was lavished with "excessive gifts and hospitality" by directors of Greenvale, which supplies almost half of the supermarket giant's potatoes, a court has heard.
He ran up a £200,000 bill at Claridge's Hotel in London, enjoyed a luxury £350,000 twelve-day holiday to the Monaco Grand Prix and received cash payments totalling hundreds of thousands of pounds stuffed inside brown envelopes.
Greenvale, one of the country's leading producers, funded the extravagant gifts by overcharging Sainsbury's for its potatoes in a £40 million deal sanctioned by Maylam.
Maylam, from Maidstone, Kent, pleaded guilty to corruption by accepting gifts from directors of Greenvale and acquiring criminal property in the form of cash held in a foreign bank account between January 2006 and January 2008.
David Baxter, Greenvale's operations director, admitted corruptly giving Maylam gifts between the same dates and acquiring criminal property between June and July 2007.
Both men will be sentenced following the trial of Greenvale's finance director Andrew Behagg, 60, from Cambridge, who denies corruption and claims that he was the victim of "extortion" by Maylam.
Paul Ozin, prosecuting, said the case involved corruption on a "massive scale".
"Mr Maylam was corrupted with wholly excessive gifts and hospitality to show favour to Greenvale and work against the interests of his own employers," he told Croydon Crown Court.
"A peculiar feature of the corruption was that it was self-funding. Greenvale were not paying for it, Sainsbury's were paying for the corruption of their own buyer and this was achieved by overcharging Sainsbury's."
The jury heard that Greenvale pumped £8.7 million of Sainsbury's money into an account dubbed The Fund, paying Maylam and his associates £4.9 million and keeping the remainder for themselves.
They reimbursed Maylam's expenses as he entertained himself at luxury restaurants and hotels, paid for luxury holidays abroad and "very, very lavish" corporate entertainment, Mr Ozin said.
Around £1.5 million was also siphoned off by Maylam through a bank account in Luxembourg on the "bogus basis" that it was for potato research or storage of potatoes in Spain.
Baxter, 50, from Market Drayton, Shropshire, will give evidence against Behagg during the trial, "painting a picture of corruption that goes to the very heart of Greenvale. To the senior management," Mr Ozin said.
The "Fund" was discussed in senior management meetings attended by Behagg, who explained to the others what went through the books, the court heard.
When Maylam asked for more cash, Behagg suggested he could be paid £85,000 for a consultancy report, it was claimed.
It was alleged that Maylam sent his receipts to Baxter's home address to avoid Greenvale scrutiny. They were then taken to Behagg before Baxter delivered the cash to Maylam in a brown envelope.
Mr Ozin said that by operating "under Sainsbury's radar" Maylam agreed to massive increases in the price of potatoes.
"The prices were much too high," he said.
"One technique was to add on one pound to a crate and with the volume we are talking about it soon adds up. They also supplied smaller packs for the same price and there were illogical prices for new packs."
When Behagg was arrested he said Baxter had told him that Maylam was offering better prices in return for Greenvale providing him with entertainment and hospitality.
"They believed that if they did not do what Mr Maylam was asking they would lose Sainsbury's business," Mr Ozin added. .
"He said he assumed Mr Maylam had the permission of Sainsbury's to use 'The Fund' for whatever he wanted. His explanation that Sainsbury's knew what was going on is incredible."
The trial, which is expected to last three weeks, continues.