Select Committee on Agriculture Appendices to the Minutes of Evidence


Memorandum submitted by Tesco plc (F 36)


  The Tesco approach to organic food is consistent with the company's overall approach, namely sparing no effort or expense to provide value, quality and service to British consumers. Understanding, anticipating and meeting consumer needs is at the heart of Tescos culture and operations. It is for this reason that Tescos 656 stores now offer 530 different organic lines, with sales increasing by 150 per cent of the last 12 months.

  Demand for organic food has been growing exponentially. The spurt in demand precedes, but has been boosted by, consumer concerns about genetic modification. Organic food has shed its "beard and sandals" image and is firmly in the consumer mainstream.

  Tescos own research reveals that two of the key groups driving the growth in demand are mothers with young children who are particularly concerned about health issues and older people who want food which tastes "the way it used to". However, demand for organic food is surging across all consumer types as awareness about environmental and health issues increases. The renewed public interest in cooking and the advent of celebrity chefs has also led more people to seek out organic food. Tesco customers report that they prefer the taste of organic food in their meals.

  As the largest private sector employer in the UK, Tesco is also aware that demand for organic produce is growing among its 185,000 members of staff. Our staff are an important community within our wider customer base and we actively encourage feedback from them. This feedback usually reaches us before the responses of other customers and is a vital bellweather for Tesco's approach—if we are not satisfying our own employees we are not meeting the needs of other customers.

  As Tesco continues to monitor changes in the expectations of consumers, new product lines are being developed and launched. Organic dairy products, meats and semi-prepared convenience items are being added to more traditional loose fruit and vegetables, teas and coffees and the existing extensive range of organic baby foods and fruit juices.


  Tesco is proud to be the largest single customer of the farming industry in the UK. Tesco has signed up to the new National Farmers' Union "red tractor" Kitemark, which was formally launched this week. Tesco Chief Executive Terry Leahy also participated in the Farming Summit, hosted at 10 Downing Street by the Prime Minister on 30 March this year.

  Consistent with an approach based on consumer attitudes and best practice, Tesco has implemented a voluntary code of practice, Nature's Choice, to encourage sustainable operations among all the farmers, including those overseas, who supply fresh produce to the company. A parallel code of practice exists on animal welfare issues. For example, all UK and overseas suppliers produce stall and tether free pigs, and meat and bone meals are banned for use in feed by all overseas farmers.

  Tesco is committed to supporting the burgeoning organic sector within the wider farming community and to developing long-term partnerships with top organic growers and suppliers. The company has a dedicated unit to liaise with organic producers and Tesco welcomes the Government's efforts to assist farmers who wish to go organic through the Organic Farming Scheme. In addition, Tesco sponsors the renowned organic research centre at Aberdeen University—the only one of its kind in the world—to investigate new organic growing techniques.

  One way in which Tesco can assist UK organic farmers is to enhance the aspirational aspect of buying organic produce. There is a significant feel-good factor for consumers who purchase goods they know to be fresh, British and organic. Tesco is committed to working with organic producers to maximise the appeal of, and thereby the market for, domestic organic produce.

  Tesco also supports the efforts of the UK Government to bring greater clarity and confidence to public policy on genetic modification. We are keen to see greater innovation and competition within the organic sector so that it becomes stronger in its own right and less dependent on negative consumer reactions to biotechnology.

  Finally, Tesco is committed to working with Government, the Soil Association, the NFU, consumer groups and other interested parties to harmonise standards for the production and labelling of organic goods, as well as the rules on transition periods, across the European Union. By providing consumers with reliable, clear and consistent product information the market for organic food should be further encouraged and participation in this market should be made simpler and more cost effective for farmers themselves.

  Harmonisation of standards is vital if supplies of organic food are to keep up with demand in a market that will continue to expand very rapidly for the foreseeable future. Ensuring a balance between supply and demand is also essential if the equitable goal of price parity between organic and conventional food is to be achieved. Tesco is adamant that the option to buy organic produce should be available to all customers, not just a wealth minority.


    —  Tesco believes that supermarkets' traditional methods of sourcing and selling products will promote organic food—the everyday process of intense competition means that products must be attractive to customers and must cover the full range of consumer preferences.

    —  Tesco remains committed to research, innovation, growth and long-term partnerships within the organic sector of the UK farming industry.

    —  Tesco firmly believes that harmonised standards and reliable information will boost demand for organic food and also help supply to keep pace with demand—allowing all consumers the option to buy organic.

15 June 2000

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