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.

Meat and Livestock Commission

The Meat and Livestock Commission have investigated the proportion of own brand red meat sales in supermarket stores. They seem to be concerned that own label shares in meat are higher than for total food.

We have been strong supporters of UK meat producers over many years, standing shoulder-to-shoulder with the industry throughout the BSE crisis and during the more recent crisis over foot-and-mouth disease. The quality levels of our meat are also being raised – for example, our standard own-brand beef is now matured for 21 days and Finest longer still – to 28 days. We are working hard to increase the number of local suppliers we use and to help small suppliers sell their products through our stores. We are opening five new regional buying offices and holding supplier roadshows across the country so that small suppliers can meet our buyers. We source meat from the UK whenever possible; 97% of the chickens we sell are British, as is 95% of fresh beef, 92% of the fresh pork and 88% of the fresh lamb that we sell.

It is true that the majority of our meat is own-brand. It is actually very difficult to create brands for raw meat cuts, as it is for milk and other commodities. For “value added” products, creating brands is easier – for example, Innocent Smoothies or Duchy Original bacon and sausages. Own brand is primarily used to increase the choice of quality products available in a category or to stimulate innovation in a category that has stagnated. It often provides an entry point for small suppliers.

We are always looking for products that satisfy customer demand. Customers like own-brand products as there is an extensive choice of price combinations with quality at each level.