Investing in the future for Britain's dairy farmers

7 Apr 2016

Tesco has today announced that it 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.

Commercial Director for Fresh Food Matt Simister said:

‘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.  

‘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.’

Peter Willes of Parkham Farms commented:

‘Over the past 15 year’s Parkham Farms has been proud to supply our great tasting cheese to Tesco. The new pricing model will ensure that we and our farmers are paid a premium price above that of the market reflecting the quality of our cheese and the milk that goes into it.  We believe it will provide a long term and sustainable structure to help build our relationship with Tesco even further.’

Mike Gallacher, CEO of First Milk said:

‘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.

ENDS

 

Notes to editors

  • In September 2015, Tesco announced it would provide additional financial provision for non- TSDG farmers who produce milk that goes into its own label cheddar cheese products.
  • The winter supplement payment was initially intended to conclude at the end of February 2016, but given the inclement weather and challenges faced by First Milk farmers during these uncertain times in the dairy market, Tesco extended the period until April to support the farmers through to spring and help them cover their production costs.
  • Currently only famers who supply milk for Mature and Extra Mature Cheddar are part of the TSDG. The new pricing model for cheese has been reviewed and standardised to make it more equitable for our producers for British cheese. The price dairy farmers receive will reduce the impact of the traditional time lag of the maturation period of milk to cheese production.
  • The new price, which is above the market price, will be set from the 17th April 2016.

Additional support Tesco provides British Agriculture includes:

  • Sustainable farming groups in lamb, beef, chicken, pork, eggs, potatoes and dairy.
  • Providing support for UK agriculture, with the development of a joint initiative with Anglia Famers - the ProducerClub.  The club delivers support for the day-to-day running of farms and an unrivalled combination of savings and benefits
  • Championing young farmers in British agriculture, offering a 12 month package of training, business planning, advice and supply chain experience through the Future Farmer’s Foundation.
  • An agriculture team, which works alongside a single product team responsible for the entire lifecycle of products.
  • A Supplier Helpline, where any issues raised by farmer, growers and producers are aimed to be resolved within 48 hours

For more information please contact the Tesco Press Office on 01707 918 701

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