Tesco has relaunched and expanded its Tesco Sustainable Pig Group (TSPG), with a new cost of production and market price + pricing mechanism to deliver long-term stability for producers.
The group, developed in partnership with Tesco’s long-term supplier, Cranswick, will cover all production methods used in the UK and include farms of varying sizes.
Tesco estimates the group could be worth at least £670m over the initial three years of the scheme. It will initially produce all Tesco’s Finest fresh pork, with the ambition of tripling in size over the next three years to produce all Tesco’s core fresh pork and sausages, making it one of the largest farming producer groups in the UK.
Under the new contract arrangements, farmers will receive a combination of cost of production and market price+ incentives, giving producers greater stability in pricing, and help to support longer term investment.
The group will play a significant role in developing Tesco’s approach to sustainable production, providing a forum for suppliers, farmers and Tesco representatives to come together and improve welfare, innovation, quality standards and collaboration.
Among the incentivised improvements in animal welfare will be a drive to increase the number of farms with ‘enhanced farrowing’, and decreasing stocking densities on farms across the TSPG.
Tesco currently operates Sustainable Farming Groups across a number of supply chains, including milk, cheese, beef, lamb and potatoes. The groups offer members fair and transparent pricing structures, as well as support to reduce emissions through carbon foot-printing, the retailer said.
They also convene industry representatives; share knowledge between farmers, suppliers and Tesco colleagues; and trial innovations that can help reduce on-farm emissions and protect biodiversity.
Currently, Tesco offers payment models and bonuses through contracts in the Dairy, Beef, and Lamb sectors, with premiums paid intended to act as an incentive to invest in sustainability. Requirements include the completion of environmental and antibiotic usage questionnaires.
Tesco said the reintroduction of the group follows 18 months of continued support for the industry, with the supermarket increasing the tonnage of British pork used in its sausages, bacon, pork and gammon by 20% during that period.
Support for British farmers
Ashwin Prasad, Chief Commercial Officer, Tesco said: “Our dedicated British farmers have faced some challenging times recently, and we’ve been doing everything we can to support them. Our sustainable farming groups play a vital role, providing forums for collaboration and innovation, as well as encouraging improvements in product quality, animal welfare and environmental measures.
“With this in mind, I’m delighted to announce a step up in our support for our British pig farmers. Our new cost of production mechanism and bonus incentives will provide real benefits to farmers who will be able to invest in key welfare, sustainability and efficiency improvements.”
Adam Couch, Cranswick chief executive officer, said: “It is great to see Tesco’s continued commitment to British pig farming and we are delighted to be collaborating with them to ensure the long-term viability of the sector.
“Our own farming expertise, long standing producer relationships and partnership with Tesco will undoubtedly accelerate sustainable, higher welfare practices. We are excited to see how this innovative approach can benefit both producers and consumers alike.”
NPA chief executive Lizzie Wilson said: “NPA is supportive of Tesco’s new contract announcement as it demonstrates not only the desire to secure a considerable British supply of pork, but that it requires a long-term retail commitment to ensure pig businesses are sustainable and able to reinvest for the future.
“We particularly note the commitment to supporting indoor producers who want to invest in improving welfare and the sustainability of their farms and hope other retailers follow suit.”
Sustainability report
The relaunch of the Group comes after Tesco and Harper Adams University’s School of Sustainable Food and Farming (SSFF) published a report on the future sustainability of the agriculture sector in the UK.
The report, which has been informed by Tesco’s farmers, sets out a series of recommendations to aid sustainability across agriculture and the wider food industry.