It looks like it’s time for Tesco to live by its slogan: “every little helps.”
In an open letter addressed to Tesco CEO Ken Murphy on Thursday, the UK’s National Pig Association urged the retail giant to help crisis-hit pig farmers manage soaring production costs. This comes after rival Waitrose announced that they would put up GBP£16 million to support their suppliers.
The pig industry in the United Kingdom is facing compounding problems from Brexit-related shortage of abattoir workers, COVID disruptions in processing plants, and the now skyrocketing costs due to Russia’s invasion of Ukraine.
In the letter, NPA chair Rob Mutimer said that if the situation does not improve, 80% of pig farmers surveyed have indicated that their business will not survive the next year. If this happens, British pork will be in such short supply in 2023 that most retailers will have problems sourcing it.
“Tesco is in a unique position to help because of its UK market share and volume of pork sales,” he urged.
Aside from Waitrose, Tesco’s other competitors such as The Co-op, M&S, ALDI, ASDA, Morrisons, and Sainsbury’s have all started to extend help through their dedicated supply chains.
Mutimer added that a relatively modest investment, presumably next to Tesco’s recent annual pre-tax profits of over GBP£2 billion, “will not only prevent the destruction of the sector, but it will mean that British pork will still be available at a price affordable to your customers.”
According to a report from The Guardian, a Tesco spokesperson has issued a response and said that they “fully recognise the seriousness of the situation UK pig farmers are facing, and have been working closely with our suppliers to understand what more we can do to support the sector.”
The spokesperson added that while their suppliers have increased payments to farmers by GBP£3.4 million since March this year, “we would like to do more and are actively working with our suppliers on a further enhanced payment plan to support farmers in the short term.”
No other details about Tesco’s plans for providing a support package have been made available as of this writing.
Information for this briefing was found via The Guardian and the sources mentioned. The author has no securities or affiliations related to this organization. Views expressed within are solely that of the author. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.