APPENDIX 17
Memorandum submitted by Tesco Stores Ltd
(Q23)
INTRODUCTION
Tesco is the largest food retailer in the United
Kingdom, with 15.8 per cent of the food market. Tesco is British
agriculture's biggest customer, and would agree that retailers
should be encouraged to support British farming. We are the largest
retailer of milk products in the UK.
The table below shows the sales of various dairy
products as a percentage of total food sales:
|
| Product | Percentage of Total Food Sales
|
|
| Milk (long life and chilled)
| 2.5 per cent |
| Butter | 0.5 per cent
|
| Cheese | 3 per cent
|
|
TERMS OF
REFERENCE
(i) The terms of reference of the committee refer firstly to the
efficiency and effectiveness of the marketing arrangements for
buying and selling milk. Tesco purchases milk from processors
rather than directly from farmers or through farmers' groups.
Therefore we would not wish to comment in detail on this issue,
as we believe we are not in the best position to comment authoritatively
on these matters.
(ii) With regard to the activities of Milk Marque, Tesco find
that Milk Marque and our other suppliers now meet our requirements
for traceability, as they are able to confirm the source (ie the
farm) of all the milk which is delivered to a particular silo.
Tesco keeps records of the supply chain back to the processor,
and we require our suppliers to keep records of the individual
farms from which they obtain their supplies.
Animal welfare is very important, partly through consumer expectations,
and partly because of its impact on food safety issues. Animal
welfare covers ethical issues such as the treatment and health
of farm animals and their quality of life. Farm assurance means
that a farm is operating in accordance with an agreed code of
practice setting out requirements for animal welfare. Tesco and
Milk Marque are discussing the establishment of a mutually satisfactory
code of practice and farm assurance schemes. Tesco would also
support a national scheme which set industry-wide standards, and
is co-operating with the National Farmers Union in the development
of its code of practice.
(iii) We read with interest the University of Manchester's 1998
evaluation of the milk quota system. In particular, the conclusion
that non-producing quota holders who are renting or who have previously
sold quota, resulted in milk producers paying an annually recurring
cost of 2.5 pence on every litre of milk produced in the UK to
those no longer producing or to those in the process of downsizing.
This represents a total cost of 12 per cent of the total annual
British milk revenue.
16 June 1999
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