Talking Tesco: UK Competition Commission

Why are we publishing these comments?

Tesco has been reading with interest the third party comments on the Groceries Market Investigation that the Competition Commission has been publishing on its website. Our formal submissions have addressed many of the issues raised by these comments, particularly those of some of the professional lobbying organisations. However, a number of submissions on the Competition Commission's website contain more specific comments about Tesco which we have not covered in our formal submissions.

Some of these specific comments are inaccurate and misleading, and we are providing a series of short notes in order to put the record straight. In the interests of transparency we are today publishing the first such series of notes.

British Independent Fruit Growers' Association

BIGFA stated that the Red Tractor scheme and our "Nature's Choice" scheme, which promote high safety and environmental standards, impose additional costs on growers, and that there are cheaper ways to prove the safety of products.

The health and safety of our products for customers is of utmost importance. High safety and environmental standards are therefore very important to us.

It is important for us to build long-term relationships with our suppliers to maintain sources of supply in the future. We do not wish to see our suppliers' businesses jeopardised by poor safety and environmental standards or unnecessarily high standards.

If BIFGA have suggestions for better, simpler cheaper ways to prove the safety of products then we would be keen to hear from them. In the mean-time we offer a summary of these schemes below.

Red Tractor

The British Farm Standard, also known as the Little Red Tractor, was launched by the Prime Minister in 1999. Its aim is to be as an easily recognisable symbol that stands out in the busy shopping environment to show consumers that the food has been produced to independently inspected standards.

The scheme is widely supported by farmers, processors and retailers. It also has the backing of the National Farmers' Union, the Ulster Farmers' Union, the Meat & Livestock Commission, Dairy UK and the British Retail Consortium. Observers include DEFRA and the Food & Drink Federation.

The National Farmer's Union have been particularly impressed with Tesco's commitment to the scheme noting that:

"We hope that with the support of willing partners like Tesco, and through initiatives to promote the logo, shoppers will choose Red Tractor products as a matter of course."

The scheme can be a great benefit to UK producers because the red tractor logo helps customers to easily identify British products. It also acts as a reassurance to customers that the products have been produced to the very highest standards. Customers are becoming increasingly concerned about the provenance of food, so a scheme such as this helps suppliers to improve their sales and fulfil a customer need for British produced food.

Nature's Choice

Nature's Choice is our integrated farm management scheme that ensures our fruit, vegetables and salads are produced to high safety and environmental standards. It differs from the British Farm Standard in that it applies equally to our international suppliers, reflecting our number one consideration: the health and safety of our products for customers.

The Nature's Choice scheme brings a host of other benefits:

  • rational use of plant protection products, fertilisers and manures;

  • pollution prevention;

  • protection of human health;

  • responsible use of energy, water and other natural resources;

  • recycling and reuse of resources; and

  • wildlife and landscape conservation and enhancement.

We take a proactive approach to environmental sustainability. We know that neglecting our responsibilities may jeopardise our customers' trust. Nature's Choice demonstrates Tesco's commitment to protecting and wherever possible enhancing our environment and to raising standards in the industry. Our customers demand fruit and vegetables that are fresh, tasty and excellent value. Not only this, but they expect Tesco to ensure that these fresh products are grown safely and with minimal environmental impact. It matters greatly – to us and to our customers – where and how the product is grown. Nature's Choice seeks to allay customers' concerns about environmental issues and provides them with the assurance that Tesco fresh fruit, vegetables and salads are procured only from those who have demonstrated that their production and produce handling systems are environmentally sound and responsible.

The scheme is governed by a committee made up of suppliers, an independent academic, an auditor and Tesco managers. The scheme applies to all fruit, vegetable and salad suppliers to our UK market. International suppliers to the UK have to meet the same product safety standards as our UK suppliers even though they are not necessarily governed by the same requirements in the country of origin.

Hence, Nature's Choice means we have a single standard for Tesco produce suppliers around the globe not just in the UK. We use the scheme to manage safety, legal and environmental issues whether they are current or, as importantly, emerging.

Nature's Choice differs from all other Farm Assurance schemes through its emphasis on environment and additional controls around crop protection (our Plant Protection Product List system), on farm packing, microbiological safety and management of natural resources, especially water. The purpose of using this scheme is to deliver 'continual improvement' of agricultural practice within our global supply base. We believe that suppliers can benefit from being part of this scheme because their other customers (retailers) are much more likely to want to work with suppliers that maintain high standards and hence are a low-risk partner.

We work with the Assured Produce Scheme (APS) in the UK and the Euro-Retailer Produce Good Agricultural Practices (EurepGAP) globally to ensure the additional points are audited only as 'bolt-ons', thus negating the need for duplication and minimising costs.

Over 11,800 farms in 62 countries are registered and are working towards Nature's Choice requirements. The scheme requires suppliers and growers to undergo regular audits, and Tesco requires a third-party audit to independently verify the Nature's Choice standards. The third-party auditor also liaises with other third party companies worldwide to help ensure there is a local solution that suits the farmer's needs.

Whilst there are costs associated with any farm assurance scheme we work to minimise these costs and we believe these schemes not only benefit suppliers, but are essential to ensure high environmental and safety standards for our customers.