4 September 1998

Tesco seals Irish beef deal

By Anthony Garvey

TESCO has patched up its differences with Irish beef producers through a £30m supply contract and the promise of greater access to the UK market.

Under the deal, launched last week, the Avonmore Waterford Group (AWG) will supply Tescos 76 stores across Ireland through a beef producer club, guaranteeing product quality and traceability.

Some 180 producers will be involved initially, but both parties plan to treble that number over the coming months. Farms will be audited at least twice annually.

It is expected that the agreement will clear the way for increased sales of Irish beef in Tescos UK outlets, where market share has been hard hit by the Buy British campaign. In the first half of this year, Irish beef exports to the UK fell by a quarter.

Speaking at the launch of the new supply deal, Tesco Ireland managing director Maurice Pratt said the agreement would make it easier to get more Irish beef on Tesco shelves in the UK. The company had given an assurance, he added, that any imported beef stocked by its British stores would come from Irish suppliers.

Company spokeswoman Sara Morris underlined that assurance. "Whenever Tesco UK needs to import beef, the Irish product will be first choice," she promised.

Tesco, which has a 25% share of the Irish grocery market, faced the threat of a boycott early this year after it placed an advertisement in farmers weekly saying it was standing by British beef and refusing to buy the Irish product, even though it was cheaper because of the currency differential.

Farmers, the industry and government reacted angrily to what was regarded as a slur on Irish beef. As shoppers threatened to stay away in protest, Mr Pratt and group chief executive Terry Leahy admitted that the advertisement had been a mistake and apologised publicly for the offence caused.

Joe Walsh, Irelands farm minister, who visited London to talk to Tesco bosses, is now confident Irish beef "will be stocked at pre-BSE levels in Britain very shortly". &#42