Our suppliers
Progress 2007 cont...
Supporting farmers
We support farmers in the countries where we operate, helping them respond to what customers want. For example, all our fresh eggs and milk in the UK are British, as are 95% of our fresh beef, 85% of our fresh chickens and 80% of our fresh lamb and pork.
We engage and share information with farmers and growers through attendance at agricultural shows, producer clubs, a dedicated website and support for industry-wide bodies and projects.
Regional producer clubs meet every quarter, focusing on how we can help producers develop their business, especially through sharing customer trends with them. We support food chain research and have a dedicated website (www.tescofarming.com) to provide information about Tesco, our requirements and standards, latest news and how to supply us.
>> Case Study: Dairy farmers
In 2007 we launched an award-winning plan to help the UK dairy industry by identifying farming systems that improve commercial viability as well as meeting customer expectations for animal welfare and environmental impact.
We created direct relationships and contracts with over 1,100 dedicated Tesco dairy farmers - the Tesco Sustainable Dairy Group (TSDG). Tesco provides farmers with a guaranteed price for milk, which is independently reviewed twice a year taking account of farm input costs and market prices.
In return, farmers are expected to follow the recommendations of an advisory board - the Tesco Sustainable Dairy Project (TSDP). The board consists of 12 elected representative farmers from the TSDG, dairy processors, advisors and Tesco representatives. Its initial programme has four key 'pillars': herd health planning; animal mobility; calves; and environmental impact.
For example, we have funded workshops for all our farmers, providing practical guidelines on how to reduce lameness in dairy cows, which would otherwise cost dairy farmers a significant amount. Our objective is to help our dairy farmers reach environmentally friendly dairy farming practice and to this end we are currently gathering information to understand where we are and what the most appropriate next steps should be.
The work of the TSDG won the RSPCA Business Innovation Award in 2008. <<
H Weston & Sons supply us with cider in the UK.
Local products on sale in Malaysia.
Morelli's ice cream supplying our stores in Northern Ireland.
Informing customers of product provenance.
Locally made bread in the Czech Republic.
'Meet your local farmer' event in the UK.
UK Code of Practice
The Supplier Code of Practice was introduced by the OFT in 2001, covering Tesco and several other large supermarket groups in the UK. It covers issues such as changes to agreed prices, contributions by suppliers to marketing costs, and dispute resolution. The Code was independently audited during 2004 and 2005, and no evidence of breaches by Tesco were found.
We were the first supermarket to appoint a Code Compliance Officer in 2005 to act as a contact point for suppliers. It enables suppliers to escalate their complaints on a confidential basis. We welcome the Competition Commission recommendation that all supermarkets appoint such an officer in future.
All buyers undergo training on how to ensure compliance with the Code in their daily work, and how to achieve solutions that work for both suppliers and Tesco.
Suppliers are able to raise any concerns through routine contact with our buyers. If necessary, they can pursue the issue with more senior management. We find that most problems are resolved in this way. If they still feel unhappy they can pursue the issue with our Code Compliance Officer, or raise a formal complaint to the OFT under the Code. In 2007, no such complaints were made, and no issues were raised with our Code Compliance Officer, either formally or informally.
Nature's Choice
Our award-winning programme, Nature's Choice, which we introduced in 1992, applies to all growers for our UK business (approximately 12,000) and aims to ensure that fruit, vegetables and salad are grown to high safety, quality and environmental standards.
The standards cover issues such as the use of pesticides and fertilisers, pollution prevention, protection of human health, use of energy and water and other environmental issues. We have also introduced targets to improve biodiversity and landscape requirements.
Growers are independently audited against the standards every year, using a bronze, silver and gold rating. Suppliers must reach at least the bronze standard in order to supply us. The silver and gold ratings are designed to encourage suppliers to seek continuous improvement of their environmental standards.
A warning 'yellow card' is issued to a grower if a critical failure is discovered. We work with suppliers to try and ensure they can improve their performance, but if they receive two yellow cards, or fail a critical control point, we will suspend supply from them until they correct faults. There were 40 yellow cards in 2007, all relating to technical compliance with the use of permitted pesticides, which did not affect health or safety.
An important development in 2007 was the adaptation of the programme to ensure that smaller growers, especially in developing countries, are not excluded on purely technical grounds if they meet the spirit of the standards.