Farmers fear cost of Tesco regulation pledge

FARMERS have welcomed a ‘seed change’ in Tesco’s sourcing policies in the wake of the horse meat scandal, but fear any extra costs will be dumped on producers.

Tesco boss Philip Clarke promised to ‘radically’ overhaul the way the retailer operates in order to restore consumer confidence.

Mr Clarke told the NFU Conference in Birmingham the supermarket giant would undertake a ‘branch and root review’ of its supply chains, vowing to bring meat production ‘closer to home’.

He said the way retailers source food has been allowed to become too complex and has left the door open to ‘exploitation from rogue elements operating in the processing industry’.

Announcing tighter regulation in Tesco’s its own food sourcing policies, Mr Clarke said the extra financial burden would not be passed onto customers.

But Leicestershire farmer Phil Abbott warned producers could not bear the brunt of any additional regulation.

Mr Abbott said: “We are not making money as it is so if that cost comes back to us you will not have a beef, sheep or pork producer who will be able to supply you with it.”

But Mr Clarke assured producers and consumers they would not be left ‘paying for the actions of an unscrupulous few’.

He added: “All parties must prosper and make a fair profit.”

The Tesco boss said examining all aspects of the supply chain would be vital to ensuring the industry was not tarnished in the same way again.

“I am in no doubt that we will find things we don’t like,” said Mr Clarke, who added DNA testing on all batches of processed beef coming into the supply chain would ensure ‘what is on the pack is what will be in the product’.

“But when we find them, we will change them. Let me assure you, we will accept nothing but the very highest standards in our supply chain.”

Mr Clarke said all the company’s beef – fresh, frozen and in ready meals – was sourced from the British Isles.

He added ‘wherever reasonable’, meat would be sourced from British producers.

In addition, from July, all chicken meat sold at Tesco will come from British farms.

Mr Clarke made mention of the company’s commitment to paying dairy farmers more than the cost of production and last Autumn’s £25m move to offer direct contracts to farmers prepared to supply Aberdeen Angus Beef and fresh pork.

Scottish NFU president Nigel Miller said: “If Philip Clarke can deliver on what appears to be a complete change in philosophy, it would change the whole operating environment. The real concern for us is delivery. The words are really positive, but today as it stands, Tesco is a long way from there.

“I’m afraid there is a level of cynicism and disbelief until the system actually changes.”

Key extracts from Philip Clarke’s speech

“I grew up in Tesco and I am enormously proud of Tesco. But I also know that we haven’t always approached our relationships with our farmers and producers in the true spirit of partnership. I have come here today to acknowledge that and to tell you what we are committed to changing that for the better.

 “This is a pivotal moment for our industry.  And it can also become a transformational moment.”

“These commitments represent a genuine shift in how Tesco sources the products we sell.”

“Taken together this amounts to the most radical change between a retailer and producers that has been attempted. I am certain that it can work.”

Also announced

Root and branch review of how products sourced

Appointment of a new Tesco Agriculture Director

Offering contracts with a minimum period of two years to all our suppliers who want them

Extending producer network

Establishing independent oversight panel to ensure commitments are delivered 

NFU Conference 2013

  • The two-day NFU conference will take place at the ICC, in Birmingham, on Wednesday and Thursday.
  • Follow it on our Farmers Guardian | NFU Conference page, where we will be posting live updates and stories and videos from the event.
  • Follow our journalists at the conference on Twitter using the #nfu13 hastag.

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