©Tesco PLC
©Tesco PLC

Tesco announces new-style contracts with potato growers

14 July 2016

Tesco is introducing long-term contracts dealing directly with potato growers to support the industry.

Traditionally fresh produce growers sell their produce to packing firms and not directly to retailers. The new contracts with Tesco still go through packers but also directly involve growers, increasing transparency and helping farmers plan their crops.

The new contracts, said by Tesco to be worth £12m over the next three years, will also provide growers with a guaranteed volume and margin, taking into account the cost of production.

Tesco claims to be the first UK retailer to offer long-term contracts and said it hopes the scheme will “pave the way for other retailers to work more collaboratively with growers”.

Over the last 20 years the number of potato growers has fallen by 85%, partly due to the “unpredictable trading environment, poor harvests and producers leaving the industry in favour of alternative crops,” Tesco said.

The new contracts have been welcomed by the National Farmers Union (NFU).

“We’ve been lobbying for a number of years for retailers, and other parts of the industry, to develop closer relationships with growers and more open and transparent relationships with growers,” said Lee Abbey, NFU horticulture and potato adviser. 

“Once Tesco announced that they were developing this potato contract we very much welcomed the principle behind it, and now that it’s actually been produced our growers are telling us that they are happy with the arrangements that they are signing up to,” he said.

Abbey also said other retailers were also developing ways to improve their relationships with growers.

Tesco also announced today it would stop selling eggs from caged chickens by 2025.

A petition asking Tesco to stop selling caged hen eggs started by Lucy Gavaghan, a 14 year old student from Sheffield, has reached more than 280,000 signatures.

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