Opinion: Has Tesco met its promises to farmers?

It’s exactly a year ago this week that Tesco boss Philip Clarke ate humble pie over the horsemeat scandal and made a number of significant commitments to farmers and to consumers, writes Farmers Weekly editor Jane King.

Jane KingJane King, Editor

At the time, Farmers Weekly promised its readers to hold Tesco to account. We were determined to ensure it delivered on its goals to source more meat closer to home, to conduct a root-and-branch review of its supply chain and to improve relationships with producers.

That pledge has taken us a painful year to fulfil because getting Tesco to talk openly about its challenges and its progress has been a struggle. Trust between the retailer and farmers was a big problem long before horsemeat was found in burgers. Tesco now recognises that and is trying to do something about it.

Twelve months on from the supply chain crisis, Farmers Weekly investigates the scale of change achieved and manages to coax the retailer into communicating about the future. We have published an unprecedented message from Tesco’s group commercial and supply chain director Kevin Grace.

It’s clear Tesco’s intentions are good but its promise of “a new spirit of collaboration” is not yet being felt by most farmers. Reversing a negative reputation and years of heavy handedness was never going to be achieved overnight. Farmers’ memories of being “bled dry” by the retailer will take some erasing, particularly as the pace of change is frustratingly slow and poorly communicated.

Tesco remains farming’s biggest customer – as large as Sainsbury’s and Morrisons combined – buying more than 20% of all the meat produced on British soil. But to survive at the top of this tree, the grocery chain must work harder at proving it is the industry’s biggest supporter – giving as well as taking – removing the fear and the cynicism.

The decision last week to use its own lorries to deliver feed and bedding to flood-stricken farmers in Somerset was a great example of supportive action. It is much appreciated and will be remembered more than fine words by farmers hit by floods because it was practical, selfless and timely.

Everyone agrees there are opportunities for all waiting to be seized at home and overseas if only the customer can be viewed as the unifying force for farmers, processors and retailers to work together to step up production. This utopia is a long way off yet.

No one doubts the organisational challenges facing Tesco as it moves from being less transactional and adversarial and more collaborative. These adjustments are harder to pull off when trading conditions are tough and the competitor landscape even tougher. Our research has highlighted that not all areas of the business appear united in putting partnership into practice. Tensions exist between the commercial and agricultural teams, and the communications strategy needs a rethink to improve transparency.

Farmers deserve a clear and sustainable relationship of equals where there is mutual trust and understanding. They need more certainty to give them the confidence to invest. In turn, farmers wanting to supply Tesco will have to play their part, too. Less talk of confrontation is required and more urgency given to adapting their businesses, so they are positioned as indispensable and integral to the supply chain. Embracing change is the one constant for those farm businesses keen to grab the opportunities.

Tesco’s reinvention as a fairer, sharing operator needs to speed up and become more evident to farmers. But let’s be patient. The hand of partnership is worth waiting for and in the words of its own advertising, “every little helps”.

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