Tesco integrates stores and finished cattle
BETTER integration of store and finished cattle markets is being examined by Tesco. Producer group manager Chris Ling, speaking at the Otley open day, said better integration would mean store cattle would be produced on specific farms, and then sold on to specified units for finishing.
"The producer groups are already looking at this. Realistically, I expect about 50% of cattle destined for Tesco to be part of this specified chain within the next five years; within seven to 10 years it could be nearer 100%."
Tesco is currently looking at the mechanics of guaranteed prices and forward pricing, said Mr Ling. "We are investigating forward pricing by one to three months."
He stressed that producer groups wanted a better return for everyone, but was keen to exclude dealers from the production chain.
"If a dealer has cattle for two or three days and then sells them on for profit it doesnt do the product any good. Removing dealers from the chain should remove, for example, a 5% profit cut, which will be available elsewhere."
The company is also looking at ensuring continuity of supply by using chilled storage, he said.n
TESCO will launch its producer groups in its stores later this year.
According to producer group manager Chris Ling, the retailer has been waiting until it could guarantee supplies before launching the concept to consumers.
"There will be a meat promotion in Tesco stores at the end of the year, and the producer groups will be launched on the back of that."