Tesco invests in UK beef and pork farmers

Supermarket chain Tesco has announced it will become the first UK retailer to work directly with beef and pork farmers as part of its £25m annual investment in UK agriculture.

The massive decision has been made to help take pressure off UK farmers, following a rise in feed prices. As part of the decision Tesco will create two new groups, which will guarantee beef farmers an above-market price for their meat, as well as a price linked to the cost of feed for pig farmers. The two groups will be run by committees of farmers.

Tesco meat, fish and poultry director Derek Lawlor explained that Tesco was the biggest customer of UK agriculture, which made him delighted to announce the new way of working with UK beef and pig farmers.

Lawlor said: “Pig farmers have been under pressure, with significant rises in feed prices, so it means a great deal to work in partnership with them and British beef farmers to help secure the industry’s future in this country.

“Not only will our customers enjoy even more high-quality, high-welfare British meat in our stores, the Tesco Sustainable Farming Groups, like our pioneering dairy group before them, will guarantee farmers a fair price for their meat and allow them to invest and plan for the future.”

Environment Secretary Owen Paterson said: “Farmers and retailers will thrive when they work together for the future of the whole industry. This is an excellent scheme which will give more certainty to beef and pork producers.

“Freeing up businesses from unnecessary burdens and getting them the right support will lead to a stronger UK production sector, which will allow British farmers to take advantage of the huge opportunities to supply markets at home and all over the world.”

President of the National Farmers’ Union Peter Kendall explained that the changes meant Tesco would source its beef and pork for specialised lines from dedicated farmer suppliers, which would help in delivering a consistent product.

Kendall said: “Tesco’s desire to establish a dedicated relationship with producers matched with a long-term direct contractual commitment should be praised. While the contract will not suit all farmers, we do believe these arrangements will foster stronger relationships and, importantly, give producers the confidence to invest in their businesses for the future. Tesco is in a unique position as UK agriculture’s biggest customer, allowing these contacts to have significant impact on both sectors.”

Speaking at the David Black Awards yesterday (7 November), Bpex chairman Stewart Houston told the industry better things were to come. He said processors had recognised the need to keep producers in business and had pushed up their prices. Houston explained that change would not happen overnight, but a tipping point could be reached as retailers fight for supply in a shortened market.

Related news:

>Tesco revamps meat and poultry offer

>First fall for Tesco in 18 years

>Tim Smith moves to Tesco


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