Tesco is to launch direct contracts with beef and pork farmers representing a £25 million investment in British agriculture with around 1000 beef farmers receiving 40p per kilo deadweight bonus over the published average price. 140 pig farmers will have prices reviewed monthly and they will be linked to actual food prices.
The changes mean that Tesco will now source its beef and pork for specialised lines from dedicated farmer suppliers, which will help it provide a more consistent product for customers. In return, farmers freely entering into a contract to supply Tesco will benefit from clear pricing commitments linked to cost of production for pork and a market premium for beef.Derek Lawlor, meat, fish and poultry director at Tesco 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 secure the industry’s future in this country.
NFU president Peter 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 that 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.
“These groups build on the success of the long-standing Tesco Sustainable Dairy Group which the NFU backed in 2007 following our vision for the dairy industry and the move comes hot on the heels of the vision document for the beef industry the NFU released in September this year. We’ve been delighted to be able to co-operate with Tesco latterly on the development of the model and wish the company every success in making this work for both consumers and farmers.”
This story was originally published on a previous version of the Meat Management website and so there may be some missing images and formatting issues.
