FDBusiness.com

Tesco will invest £6 million over two years to help support British agriculture. The retailer has created the new Tesco Cheese Group (TCG), which will guarantee dairy farmers an above market price for the milk they produce for Tesco’s British own-label Mild, Medium, Mature, Extra Mature, Red Leicester and Double Gloucester cheese. The move will deliver a fair and consistent pricing model for UK farmers, and will provide them with the security and ability to plan ahead for the future.

Building on the success of the Tesco Sustainable Dairy Group (TSDG) which was established in 2007, and pays a market leading price for dairy farmers who supply Tesco with milk to the help them manage the economic volatility of the market; the new Cheese Group is the latest addition to the retailer’s programme of initiatives to support British farmers.

Tesco commercial director for Fresh Food Matt Simister says: “We have created this new cheese group to help us to meet customers’ needs whilst also establishing a long term sustainable livelihood for our farmers. By providing them with the assurance of our commitment, we are hoping to give our producers the confidence to invest so that they can deliver what customers are looking for in an efficient way.”

He adds: “It is our hope that up to 200 more dairy farms across Britain who produce milk for our British cheese, in addition to the 600 producing milk through the TSDG, can work with us in partnership to create a successful and sustainable future for their production. For almost a decade we have worked with dairy farmers to offer the best possible quality milk , produced to the highest standards for our customers, whilst ensuring farmers receive a fair price for their milk. We are confident that this new initiative will enable producers, for our own-label cheese, to also plan and budget for the future; and focus on the things that matter most-  meeting high animal welfare and food quality standards for customers.”

Mike Gallacher, chief executive of First Milk, the British dairy co-operative, says: “This new agreement we have concluded with Tesco is about establishing a long term, progressive and sustainable supply chain partnership over the coming years. While the current context is hugely challenging in dairy, we need to continue to keep focused on the long term ensuring that we put in place business models that can deliver for our customers, consumers and producers.”

The new mechanism provides clear, equitable and transparent pricing which will be set regularly throughout the year. The price will reflect the market and will also award farmers a two pence per litre bonus – in recognition that they must adhere to the Red Tractor assurance scheme, as well as additional Tesco welfare standards, to improve cow health and welfare.