Questions & Answers
YOUR PROFITS ARE BEING MADE AT THE EXPENSE OF FARMERS. WHY CAN’T YOU PAY FARMERS MORE?
Successful retailers grow their business by working with suppliers to meet customer needs. This means having positive relationships with suppliers - many suppliers have grown alongside Tesco.
We play our part in supporting UK farmers to meet these challenges by working with the industry to help it to grow in existing and new markets. For example by working with UK growers to extend the growing season so that we are able to sell more British produce throughout the year.
WHAT ARE YOU DOING TO SUPPORT BRITISH FARMERS?
We are British Agriculture’s number one customer and buy more fresh meat and produce than anyone else. A key role that we can play in supporting the industry is through sharing information on customer trends and working with our suppliers to innovate and develop products that respond to these trends, in particular at the premium end, such as our Finest and Organic brands.
We are also supporting British farmers through our commitment to celebrating British provenance, through labelling and point of sale at both a local and regional level.
Tesco has a producer club manager who’s main role is to work with British farmers that are supplying Tesco. Giving them information on the business and customer trends and listening to what they have to say by visiting many of their farms on a regular basis.
We also attend a number of shows during the year so our farmers can meet us at the shows and speak to the buying teams and Agriculture team.
WHY DON’T YOU DO MORE TO PROMOTE LOCAL PRODUCTS IN STORE?
We already offer 7,000 regional lines including 600 Welsh lines, 1,500 Irish lines and 1,000 Scottish lines. We have dedicated buying teams in Scotland, Wales and Northern Ireland, whose task it is to seek out and develop relationships with suppliers. We have also invested in new technology to enable our growers to supply us for more of the year. Examples include cucumbers, strawberries and asparagus. We have ambitious plans for the future to improve our local offering still further. We have recently announced that we will be hosting open days where small suppliers can meet our buyers. Our aim is to sell more local and regional lines than you will find in any other store.
WHY DO YOU IMPORT SO MUCH FROM ABROAD?
Tesco is British agriculture's number one customer, with over 90% of our fresh pork, beef, and chicken coming from British farms. We import very little produce and only do so where the product can not be bought in the UK or to ensure that we can meet demand from customers. We have also announced ambitious plans to help our UK suppliers meet the demand from the consumer for added-value Finest and Organic products. With the small amount of produce we do source overseas we remain committed to equivalent farm standards and always label our products clearly with country of origin.
WHAT ABOUT FOOD MILES? WHY DON’T YOU SOURCE LOCALLY LIKE THE SMALLER SHOPS?
We have ambitious local sourcing targets to build on our existing range of locally sourced products and plans to promote local food in our stores still further. What’s more, a recent study from Transport 2000 showed that supermarket supply chains are more efficient, and have a lower carbon impact, than those of smaller retailers. This is because we're constantly working with our suppliers, local and national, to bring together our separate supply chains, invest in new technology, and minimise the distances travelled. In fact, over the last couple of years, we have already reduced the miles travelled by suppliers to our distribution centres by 23% and reduced fuel usage by 14%.
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HOW YOU DO ACHIEVE SUCH LOW PRICES, IF NOT BY SQUEEZING SUPPLIERS?
This is a common misconception. We have grown and made savings that we invest in reducing prices by maximising sales densities in our stores, increasing our productivity, and making other savings (e.g. in energy use). Examples of greater efficiencies are the introduction of merchandisable units, hand held scanners and paperless picking. We share this knowledge with our suppliers, which helps deliver additional savings.
DOESN’T THE SUPERMARKET CODE OF PRACTICE NEED TO BE STRONGER?
The existing supplier code of conduct regulates buyer behaviour and is legally binding on signatories like Tesco. The OFT reviewed the Code last year and found that Tesco complies with it. Our confidential supplier survey confirmed that on the whole suppliers are pleased to work with Tesco and feel that we are fair. Smaller buyers benefit from Tesco partnership with suppliers through supplier growth, better pricing, better logistics, higher quality, innovation etc
WHAT ARE YOU DOING TO HELP BRITISH DAIRY FARMERS IN PARTICULAR?
We are working with our suppliers, and the rest of the supply chain, to develop and deliver more added-value dairy products that help increase the returns for milk producers. We recently launched a selection of UK-sourced snacking cheeses and have increased our regional cheese range. We have also launched a range of flavoured milk drinks using British milk and developed and launched a range of probiotic yoghurt drinks. We have also recently launched a new British sourced cholesterol reducing milk, a great example of how by following the customer it is possible to carve out new opportunities and develop new markets
WHY CAN'T YOU PAY DAIRY FARMERS MORE WHEN THEY ARE FACING SUCH DIFFICULTIES?
The farmers who supply our processors are paid prices at the top end of the farm gate milk price. We remain committed to British farmers and sell more British milk than anyone else. But we buy milk from processors and cannot dictate what processors pay farmers
