|
Supplementary memorandum submitted by Tesco (DFoB 33a)
TESCO SUSTAINABLE DAIRY GROUP
We have direct relationships and contracts with over 1,100 dedicated Tesco Dairy farmers - The Tesco Sustainable Dairy Group (TSDG). We provide TSDG members with a guaranteed price for milk which is independently reviewed twice a year taking into account farm input costs and market prices. The current price is 27.37ppl. All of our own brand standard milk is supplied by Tesco Sustainable Dairy Group farmers. This represents 76% of our weekly liquid milk sales
The Group is about more than just price. It is about establishing collaborative relationships within our milk supply chain and working together to improve quality, animal welfare and environmental impacts. In practice this means regular communications through regional meetings, workshops and conferences; high standards through for example mobility scoring and milk recording; reducing environmental impacts through our carbon footprinting and labelling exercise and nutrient management plans and research and best-practice through our dairy Centre of Excellence at Liverpool University.
SUPPLIER EXAMPLES
The Committee asked for examples of well-run and well-organised co-operatives with whom we enjoy a good relationship.
Before giving a couple of examples we thought it would be useful to set out what it is we look for in establishing and building relationships with our suppliers. It is also worth reiterating that we choose our suppliers based on their individual merits, not on whether they are a co-operative or otherwise.
We are committed to providing our customers with a wide choice of healthy, good quality and affordable products. We therefore aim to work with the best suppliers and to source the best products at the best prices. In addition to being competitive on price, any potential supplier is required to meet high standards on quality, hygiene, the environment, animal welfare and labour. We expect our suppliers to meet these standards in every country we source from. Our success is linked to that of our suppliers and we therefore strive to build strong long-term relationships. This provides them with the certainty to invest in and innovate for the future. This ability and willingness to invest and innovate - be it in new processes, products or packaging - is also an important part of what we look for.
The one area where we take a slightly different approach is in local sourcing. More information on our wider programme follows below but here we recognise that smaller, often family-run businesses may need additional support in meeting our standards. In these cases we offer assistance such as the free loan of metal detectors for use in factories which can help suppliers meet our standards on areas such as food safety. We also help them to understand the sales potential of their products before they make an investment in equipment.
An example of a
co-operative we work with in the
A good example of an international cooperative is Silver
Fern Farms who are
TESCO LOCAL SOURCING PROGRAMME
Many customers want to buy products that support their local businesses and economy and this is still true even in the current economic downturn.
We
offer a large variety of locally grown produce which is available during the
British season. Lines will vary across
the country depending on the agricultural environment and the climate, from
cherries in
We now have over 4,000 local lines and we work with over 480 local and national suppliers who provide us with celebrated and diverse local products from apples and potatoes to confectionary.
In
2008 local products accounted for £624 million or 2.2% of
To
ensure we understand what our customers want to buy in their area we have a
network of 5 regional buying offices. Each office has a dedicated team of
buying and marketing managers who are supported by local technical and
merchandising teams. Collectively they work with local suppliers - many of them
very small family businesses - to launch their lines and help raise awareness
amongst our customers. We also offer a
great deal of technical help to our local suppliers and help them to better
understand our customers. One way we do
this is through a partnership with
Our
local sourcing programme has led to a number of success stories where producers
started out in a few local stores then ended up being stocked nationally. One such success is
To increase awareness about local products we are soon to launch a new point of sale package which highlights the origin of local products. This links the product to the location where it was produced and the local people behind in the business.
We work with many community organisations and schools to tell people about where our food comes from and to encourage a greater understanding of the food industry. Our work with the Royal Highland Educational Trust for example has helped to deliver over 2000 assisted farm visits for schools as part of the countryside initiative.
As
part of our commitment to
Tesco November 2009 |