Tesco’s decision to extend its sustainable pricing model to its British cheese supply base with First Milk and South Caernarfon Creameries is a significant move, the NFU and FFA said today.
The retailer has promised to pay its processors 29.93ppl for the milk that goes into its cheeses for the winter period – but that its processors must be able to transparently distribute this back to the farmer.
NFU dairy board vice chairman Michael Oakes said: “We are pleased that Tesco has recognised the challenging time the dairy industry is currently facing. This is especially welcome as we are heading towards the winter as farmers face significantly higher costs of production while cows are housed.
“This is a significant move from Tesco, as it extends its Tesco Sustainable Dairy Group’s cost of production model to its cheese supply base. This is on top of its move to 100 per cent British yogurt in March 2016.
“This is the first retailer we have seen to make this move and this is a positive step given the current environment. Consumers have made it clear that they want to see a dairy sector that is sustainable in the long-term and all retailers need to be accountable for this.”
FFA chairman David Handley said: “The NFU and FFA have held positive talks with Tesco and we are pleased that it has listened to our very real concerns and is offering some kind of security for our struggling dairy industry.
“We need the processors to ensure they can pass on the benefits of this commitment back to our dairy farmers on the ground.”
Tesco has also promised to label all fresh milk sold in its One Stop stores with a Red Tractor logo from 1 December 2015; and that all country of origin labels on cheese are clear and only specify one origin.
