Tesco UK

Tesco is to begin adopting its collaborative producer-group model in fruit and vegetables.

The supermarket already has dedicated producer groups in the meat and dairy sectors, but until now such initiatives have been conspicuous by their absence in horticulture.

However Richard Marris, commercial director for fresh food at Tesco, told a horticulture breakout session at this week’s NFU Conference that that is all about to change.

“If we go back a year – and [Tesco CEO] Philip Clarke talked about it at this conference last year – [the plan] was to build our relationships with the supply chain in the protein sectors and meat. We’ve done a lot of work on that.

“We are absolutely now looking at this [horticulture] sector, doing the same piece of work there and building longer-term relationships all the way down the supply chain, [bringing] greater certainty and security. It is working for us in protein. We are absolutely having the first conversations to try to build that [in fresh produce].”

While Marris conceded Tesco was very much “at the start of the journey” when it comes to horticulture, he stressed the model was working on other commodities and the retailer wanted to adopt it in fruit and vegetables.

The announcement drew praise from growers in the audience. Sarah Dawson, chair of the NFU Board for Horticulture, said: “I want to say a huge thank you for that commitment. I’ve had a lot of calls from members saying there’s some great work going on in the protein sector but when is it happening in produce? That’s excellent news. We would like very much to support Tesco in that journey for produce.”

Marris also moved to rebut fears that growers could lose out as a result of the latest cross-category price reductions at the supermarket. He stressed: “We shouldn’t get confused between cost price and retail price. Retail price at the end is the domain of the retailer. That will not impact the cost prices we are paying. We are cutting prices in a number of different categories, but we do need to do that in conjunction with the supply chain.”

Topics