Food production costs must fall

28 September 2001

Food production costs must fall

TESCO chief executive Terry Leahy has warned farming must produce food for less as price lists are squeezed through global competition between retail groups.

Mr Leahy said consumers spend less on food each year but demand more quality. "In 1960 35% of disposable income went on food, by 2001 it was 13%. Tesco will be out of business by 2070 if we stay as we are."

Speaking to 350 graduates and their families at Harper Adams University College, Shropshire, Mr Leahy outlined figures showing the companys full price list fell 12% over the last five years.

With liberalisation of world trade, retailers were vulnerable to more competition. "Were having to learn in a few short years what manufacturers learned over decades about the effect of global trade."

Being a successful global player was essential, he said. By 2003 Tesco expects to have more selling space outside the UK than within. &#42

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