Tesco suppliers in price warning

Farmers have warned it would be unacceptable for suppliers to "share the pain" of Tesco's multimillion-pound price-cutting campaign.

The National Farmers' Union (NFU) was responding to comments from Tesco UK chief executive Richard Brasher, who said he expects suppliers to "come to the table" for discussions on shouldering the cuts.

Mr Brasher believes Tesco's supply chain will benefit from the cuts because of an increase in volumes.

The price cuts will be partly funded by slashing the number of multibuy promotions and scrapping double Clubcard points, meaning the scheme will revert to one point for every pound spent.

But Thomas Hind, NFU director of corporate affairs, said: "Our main concern is about the prices farmers receive for their products rather than retail prices but experience tells us that retailers often expect their suppliers to 'share the pain' of any cut in retail pricing.

"This would be unacceptable in the current climate when farmers and manufacturers are facing massive cost pressures."

Tesco has had a fraught relationship with some of the farmers it uses to source its products.

Around 70 pig farmers and supporters of the industry gathered on a picket line outside the Tesco AGM in July in a battle to win "a fair price" on their products.

Liberal Democrat president Tim Farron, whose constituency is in rural Cumbria, is a vocal critic of the major retailers' treatment of the farms that supply their produce.

Mr Farron earlier this month admitted feeling "uncomfortable" that his party's conference included supermarket giants Asda and Tesco as sponsors.

The Government is committed to introducing legislation to create a supermarket watchdog to investigate alleged breaches of the Grocery Suppliers Code of Practice, which came into force last year.

The code was brought in after the Competition Commission found large retailers were passing on excessive risks and unexpected costs to their suppliers.

PA