Calling for the retailer to accept industry calls for a supermarket ombudsman, Mr Kendall told Sir Terry good retailers should welcome a watchdog to regulate relationships with suppliers.
“You do some brilliant work with the dairy supply chain and it’s a great example of how you can and should work,” he told Sir Terry. “But sometimes it’s too much about getting the price down.
“Farmers understand consumers are our salvation and in this time of recession we want them to know we provide value for money,” said Mr Kendall, adding, “Your short-term target of getting cheaper prices is undermining farmers’ confidence to plan for the future.”
He continued: “We want you to support an ombudsman and a code of practice. Good retailers should welcome the confidence it would bring to consumers and producers.”
Sir Terry dismissed Mr Kendall’s calls, claiming an ombudsman would not benefit consumers.
“It’s right to balance short with long-term targets,” he said. “But the supply chain has to work the other way and bring messages from consumers.
He added: “The ombudsman is intended to respond to the interests of suppliers. What’s better is to respond to the consumer – an ombudsman would leave the consumer unprotected.”
Sir Terry admitted Tesco did not always get the right balance when dealing with smaller suppliers, but said farmers could not be expected to be “treated with kid gloves”.
“We deal with small business but also huge multinationals. Someone needs to negotiate with suppliers on the behalf of consumers,” he said. “We try to get that balance right – it doesn’t always work, but we do try.
He added: “We’re not always going to achieve the balance between what producers and consumers want because the demands of the consumer are different.”