UK: Tesco offers long-term lamb supply contracts

By Katy Askew | 5 February 2014

Tesco offers long-term contracts to lamb suppliers

Tesco offers long-term contracts to lamb suppliers

UK retailer Tesco has offered 200 UK lamb suppliers two-year contracts as part of its drive to shore-up the supply chain.

The move sees Tesco and processing partner St Merryn, part of 2 Sisters Food Group, offer lamb producers direct contracts that include a premium on the market price of lamb.

The suppliers will help fill demand for Tesco Finest lamb between April and December, the UK lamb season, Tesco said. 

It is similar to a deal the company offered its beef suppliers late last year and comes as Tesco works to safeguard the reliability of its supply chain in the wake of the horsemeat contamination scandal.

By providing longer-term contracts, the company hopes that it will enable farmers to invest in their businesses in order for UK agriculture to remain competitive, fresh foods commercial director Richard Marris said.

"We hope these contracts will play an important part in giving sheep farmers the confidence they need to invest and plan for the future."

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Over 200 lamb farmers sign two year contracts with Tesco

More than 200 British lamb farmers have entered into direct, two year contracts with Tesco, as part of its long-term commitment to British agriculture, the retailer announced today. The contracts represent the first time a major UK retailer has offered formal, two year direct contracts with lamb producers.

The contracts, which have been offered to farmers in conjunction with Tesco's principal processing partner St Merryn, part of 2 Sisters Food Group, follow a similar contract offer to beef farmers, announced by Tesco in December.

The contracts include a premium above market price for lamb, with all farmers forming part of the Tesco Sustainable Lamb Group, which aims to develop and strengthen Tesco's relationship with its farm suppliers.

Lambs will be born and reared on farms that form part of the Red Tractor Farm Assurance Scheme, which ensures high welfare and production standards. The 200 farms will help supply Tesco with lamb for its finest* range, between April and December, when British lamb is best in season.
Working with St Merryn, Tesco will look to extend the contract offer to more lamb farmers in the coming months.

Richard Marris, Commercial Director of Fresh Foods at Tesco said:
"The uptake of the contracts so far shows that sheep farmers are keen to work with us in building stronger, closer relationships between Tesco and British agriculture. We recognise this is one measure of progress, but we're excited to be working together with farmers to bring quality, fresh food from British farms to our customers. We hope these contracts will play an important part in giving sheep farmers the confidence they need to invest and plan for the future."

Farmers from across the UK have already signed up to the scheme:
John Maynard, whose farm in Devon will benefit from the agreement, said:
"It is very encouraging that Tesco are making long term commitments to lamb producers. Knowing I will be getting a premium for my lambs gives me an extra incentive to invest in my flock and continue to produce top quality finest* lamb from the South West."

Warren Davies, who supplies finest* lamb from his farm near Abergavenny in the Welsh Uplands also welcomed the commitment from Tesco:
"Knowing that Tesco have committed to Welsh finest* lamb has given my son and I greater confidence as we know that if we market our lambs during the finest* Welsh period we will receive a premium for producing top quality PGI Welsh Lamb. This commitment from Tesco to Welsh lamb will help us develop our business as we know that the premium has been guaranteed for the next two years."

Original source: Tesco

Sectors: Meat & poultry, Retail

Companies: Tesco, 2 Sisters Food Group

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