Sainsbury's offers its organic lanb suppliers price guarantees

02 June, 2006

A THREE-FOLD incentive scheme, aimed at organic lamb producers, has been launched by Welsh company Oriel Jones in partnership with Sainsbury's.

The processing plant in Llanybydder, west Wales, which has produced organic lamb for Sainsbury's since September 2005, launched the scheme to ensure a steady supply of organic lamb, which has seen a surge in demand. Wyn Williams, procurement manager for Oriel Jones, announced the launch at a meeting of organic lamb and beef producers hosted by Cumberland and Dumfriesshire Farmers' Mart.

The first incentive introduces a loyalty bonus scheme for existing and potential customers who consistently produce quality lambs to specifications. Williams said: "We would like to form long-term trading relationships with existing and new producers so that we can work as a team to meet the demands of the retail market and ensure a stabilised, long-term demand and supply base." The second incentive sees a minimum price guarantee throughout winter, providing a solid trading base for producers and processors, starting January 2007. It includes incremental monthly rises, over five months, until May 2007. "Producers must be sure that there is a future market for their organic produce and that they can look forward to worthwhile returns for their efforts," Williams said.

He added Oriel Jones believed demand for organic produce will only continue to grow. "We want to not only help existing trading relationships flourish, but also encourage new trading relationships with future producers." Finally, a premium will be paid to all in-conversion lamb producers. Until the produce is fully organic, lambs would be marketed conventionally but as soon as the farm/producer gained full organic status, livestock would be processed organically and qualify for the premiums and relevant minimum price contracts available.

Matt Johnston, Sainsbury's organic meat buyer, said the measures were designed to secure supplies to the sector so that supply could continue to keep pace with demand."We have seen exceptional growth in the organic meat market across the last year. Organic lamb sales are up over 35% year-on-year," he said.





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