Tesco is to step up its support for the British dairy industry by significantly increasing the price it pays for all its fresh milk.
The 520 British dairy farmers that make up Tesco’s Sustainable Dairy Group (TSDG) are set to benefit from a near 20% rise for every litre they supply the retailer, with the price increasing from 34.16p per litre today to 40.84p per litre in May. TSDG farmers will also see an interim price rise in April to address the current unprecedented levels of on-farm inflation.
The price Tesco pays its farmers for its fresh milk is independently set on a quarterly basis and takes into account inputs such as feed, fuel and fertiliser, resulting in a fair price which is reflective of the cost of production.
Tesco set up the TSDG 15 years ago to address uncertainty and volatility in the dairy sector, with farmers guaranteed a stable price no matter what happens in the market, as well as ensuring they can plan for the future and invest in improvements on farm.
Since November 2007, Tesco has paid £300m over market prices to its dairy farmers. By paying a fair price, Tesco farmers have been able to invest in animal health and welfare, carbon reduction initiatives and biodiversity improvements.
This has included reducing on-farm carbon emissions by 8.5% since 2016, continuous improvement on cattle health and welfare standards, and soil health and biodiversity benefits through the planting of herbal leys, a mix of plants and herbs which absorbs carbon from the atmosphere and helps insects and wildlife bloom.
Dominic Morrey, Tesco Commercial Director for Fresh Food, said, “At a challenging time for the agriculture sector in the UK, we’re pleased to be offering our dairy farmers a significant increase in the price we pay for our fresh milk.
'Our farmers work incredibly hard to provide quality, fresh food to our customers, and we recognise the critical role they are already playing in helping to transform the food industry, as we tackle issues such as climate change and food security.
“Set up in 2007, the TSDG embodies our partnership approach with our dairy farmers and has enabled us to introduce innovations such as carbon foot-printing and biodiversity measures, as well guaranteeing quality British milk for our customers. We’re looking forward to supporting the industry for many years to come.”
Bill Higgins, TSDG Committee Chairman representing Müller, said, “Following the extreme volatility we as farmers have faced in recent months. Tesco has stepped forward to help us adapt the TSDG model to better reflect and support us through these unprecedented times. This only goes on to strengthen our 15-year collaborative relationship.”