Tescoâ€™s announcement that it is to launch direct contracts with beef and pork farmers is a positive move to improve supply chain relationships, the NFU said today.
The changes mean that Tesco will now source its beef and pork for specialised lines from dedicated farmer suppliers, which will help them 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.
NFU President Peter Kendall said: â€œTescoâ€™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 agricultureâ€™s biggest customer allowing these contacts to have significant impact on both sectors.
â€œThese 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. Weâ€™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.â€