Tesco aims to "shorten" supply chain

Tesco aims to "shorten" supply chain

Efforts to source products ethically are central to UK retailer Tesco's ability to build consumer trust, ethical trade director Giles Bolton insisted yesterday (13 March).

Following last year's horsemeat scandal, Tesco has made strides in its efforts to "shorten" the supply chain and develop direct relationships with suppliers, Bolton said.

"Our approach to managing stronger quality, better value, stronger ethics, is to shorten the supply chain, go direct to source. Supply chains are shortening in the minds of consumers as well because of social media and the ability to communicate. Customers are becoming more aware... if you shut your eye to that you will be caught out. You have to integrate these issues into the core way that you operate your business."

The reputation of the UK's largest grocer took a hit when it became embroiled in last year's horsemeat scandal. A number of Tesco private-label products, including frozen beef burgers and spaghetti bolognese, were found to contain undeclared horsemeat that made its way into the supply chain as part of a Europe-wide fraud.

Tesco has since extended its dairy group initiative, which provides a dedicated pool of suppliers with a milk price premium, to include UK beef and lamb farmers.

"If you are trying to get confidence in your food supply chain... you have to have good supplier relationships to underpin that. Relationships that are really strong. You have to have suppliers you can trust. Commercially now for a couple of years we have been trying to cut out the middle man, work direct with suppliers, because you get better results on quality but also on ethics," Bolton said.

Speaking at the Retail Week conference in London, Bolton added Tesco has also extended its product testing programmes. "For Tesco, every big crisis... makes everyone review how they work. The... absolutely fundamental customer crisis is over trust in food. Those kind of events do make you step back and review what you do... In the case of horsemeat, Tesco now has the world's biggest DNA isotope testing programme."

Speaking earlier in the day, Tesco chief executive Philip Clarke also stressed the importance of strengthening consumer trust.

"Bigger is no longer seen as better by today's customers... We have to open up our business," Clarke said. "We as a business have to work harder to demonstrate to our customers how we use our scale for the benefit of the communities that we serve."