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.
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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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By GlobalData
