Tesco includes cheese producers in dairy group

Tesco is trialing the inclusion of cheese producers in its Sustainable Dairy Group.

The model is being extended to include the 30 farmers who produce cheddar for Devon’s Parkham Farm cheesemakers, which produces all the supermarket’s own-brand mature and extra-mature cheddar.

During the trial, which starts on 1 November, farmers will be paid 33.79p/litre, which includes 0.5p/litre to submit their costs to consultant Promar. This is the same rate liquid producers will receive and is based on a independent review of the costs of production. Tesco said the trial will help establish what the costs of production are for milk destined for cheese.

“The NFU welcomes this move by Tesco to work with British dairy farmers and offer more transparent contracts for the supply of milk for Tesco-branded cheese,” said NFU president Peter Kendall.

“If successful, this trial of a determinable milk pricing mechanism should boost those farmers’ confidence to invest in the future. Ultimately, we look forward to Tesco sourcing more of the food it sells from closer to home and consequently growing the market for British dairy products.”

The Tesco Sustainable Dairy Group was established in 2007 to address the uncertainty facing British dairy farmers caused by market volatility, said Tesco’s UK commercial director John Scouler.

“This trial means we can offer similar support to the dairy farmers who provide milk for our cheese. We’re looking forward to reviewing the results and establishing how we can help secure the future of a prosperous, sustainable British cheese industry,” he said.