Tesco: Exposed


On Friday 13th June Friends of the Earth, Grassroots Action on Food and Farming,Banana Link, the Small and Family Farms Alliance, farm and National Sheep Association attended the Tesco AGM to expose the company’s record of putting profit before people and the environment, despite the claims in its Annual Report and Corporate Social Responsibility report.

This briefing reveals how Tesco continues to make huge profits at the expense of farmers, communities and the environment. Tesco is abusing the power that results from its huge market share (25.8%). Clearly Tesco cannot be trusted to change its practices voluntarily. Friends of the Earth and GAFF are therefore calling on the Government to:

· legislate to ensure that retailers trade fairly with their suppliers by imposing a new stricter Code of Practice on the biggest supermarkets, and appoint a watchdog with teeth to ensure it is being complied with
· stop any further consolidation of power by blocking all the Safeway merger bids.

Friends of the Earth is also seeking changes in Company Law so that communities can hold companies like Tesco to account for their impacts.


Tesco says: “We have a long-standing commitment to source as much UK produce as possible”
Tesco refers to its “commitment to UK farming” and claims that it has “consistently supported British farmers over recent years. As our business has grown, so has that of our suppliers”. “We have developed long term working relationships with our suppliers and by working together to meet customer needs we have both grown our market share”.

Michael Hart is the chairman of the Small and Family Farms Alliance:

Michael Hart says that the increasing gap between farm gate and retail prices is in some cases down to “clear profiteering”. For example, in 1991 the farm gate price of potatoes was 9p per Kg and the retail price was 30p; a 21 pence difference and a 233.5% mark up. In 2000 the farm gate price was 9p per Kg but the retail price was 47p per Kg; the difference now being 38 pence – a huge mark-up of 425%. The same applies to cauliflower’s farm gate price of 24p in both 1990 and 2000 with a retail price of 73p in 1990 and 98p in 2000; an extra 25p per cauliflower and a profit increase of 35% [1]. Michael Hart comments that “Both of these products require no processing other than grading and packing, both of which are done by the farmers before being put on the supermarket shelf, so clearly the increase in the farm gate to retail difference is due to supermarkets wishing to increase profit margins at the farmers expense. This is a clear abuse of their power in the food chain and a practice which is and will cause severe damage to UK farming.”

“British farmers have delivered the higher and higher standards demanded by supermarkets but have been rewarded for doing so by supermarkets forcing down farm gate prices to levels which cause immense hardship among farming families, to the extent that agricultural charities are now paying out record levels of support for farming families and the number claiming state benefits are at previously unseen levels.”

“The low farm gate prices being paid to farmers by supermarkets are destroying any chance we have of a sustainable farming system in Britain. Without profitable farming the environment, landscape and rural communities suffer. It is clear that supermarkets are using their near monopoly position in the food chain to make excess profits at the expense of both farmers and consumers.

Peter Lundgren is a Sussex dairy farmer’s son and has a 95-acre arable farm in Lincolnshire. His farm is worked by contractors while Peter and his wife run a more profitable retail business. Peter was a founding member of farm. Responding to Tesco’s claims about supporting UK farmers Peter comments:

“Supermarkets are using their dominance of the food chain to fleece both the farmer and the consumer. And for what? Short term short-sighted profit. Tesco claims to care about its farmer suppliers but their pricing policy is not just damaging family farmers, it is also damaging the environment and rural communities as well. The farming industry is losing over 11 farmers a day; farmers who created and maintain the British countryside, and who support the rural economy and the rural communities. The loss of these farmers will mean the loss of so much more besides. It’s time for Tesco to put its money where its mouth is and initiate policies that ensure UK farmers receive a fair farm gate price for producing safe wholesome food to the high welfare and high environmental standards demanded by the consumer”