Tesco has announced a £25m annual deal with beef and pork farmers, promising them better prices and longer contracts.
The supermarket giant – which has previously attracted criticism from farming groups for its prices and short contracts – said the move is designed to take the pressure off British suppliers following rising feed prices.
The arrangement will create two new groups run by committees of farmers and will guarantee an above-market price for beef suppliers and pork prices linked to the cost of feed.
Tesco said the “industry first” will give direct contracts lasting up to 36 months to members of the groups, giving livestock farmers more security, the ability to plan ahead and a guaranteed fair price for their meat.
The retailer will work with around 140 pig farmers who will supply the retailer with the majority of its own brand fresh pork, with prices for meat reviewed on a monthly basis, taking feed into account.
Around 1,000 beef farmers will supply Tesco with all its Finest brand beef.
Asked if the deal would mean higher prices for consumers, a Tesco spokeswoman said: “There will definitely be no costs passed on to customers from the groups themselves.”
NFU president Peter Kendall welcomed the announcement, saying: “Tesco’s desire to establish a dedicated relationship with producers matched with a long-term direct contractual commitment should be praised. We believe that these arrangements will foster stronger relationships with the farmers involved and ensure that Tesco is able to provide a consistent product for consumers.”
Tesco’s meat, fish and poultry director, Derek Lawlor, said: “As British agriculture’s biggest customer, we’re delighted to be announcing this new way of working with British beef and pig farmers.”