November 16, 2007
UK's Tesco signs dedicated milk agreements with dairy farmers
Tesco has signed dedicated milk supplier agreements with Arla and Robert Wiseman Dairies, removing the cloud of uncertainty faced by UK dairy farmers as feed prices and material costs threatened the future of the industry.
The supermarket announced plans to move to dedicated suppliers earlier this year and managed to seal the agreement earlier than expected.
Dedicated farmers supplying Tesco receive 27.5p/litre, with a further price review due in March 2008.
Nearly 800 UK farmers are expected to benefit from the agreement.
Kari Daniels, Tesco's head of chilled foods, said the whole supply chain was already seeing a benefit from the move.
The long term investment the company has made in the future of the British dairy industry brings the retailer closer to suppliers, he said.
The transparent pricing structure gives farmers renewed confidence in the industry, he said.