Tesco is set to reduce the number of dairy farmers supplying milk to its Sustainable Dairy Group (TSDG) as part of a sustainability initiative. The move aims to enhance efficiency and promote sustainable practices but has raised concerns among affected dairy farmers.
The Tesco Sustainable Dairy Group (TSDG) has announced a significant shift in its supply chain strategy, aiming to reduce the number of dairy farmers directly supplying fresh milk for its own-label products. Established in 2007, TSDG is the largest UK-based retailer-farmer collaboration. This move is part of Tesco’s broader sustainability goals.
TSDG Announces Supplier Reduction Plan
The exact number of farms affected by this reduction has not been specified. However, TSDG plans to give a 12-month notice period to the affected dairy farms before any changes take effect. Additional details regarding the selection process and the criteria for the reductions are expected to be disclosed next month.
Concerns for Scottish Dairy Farmers
Concerns have been raised regarding the potential impact on Scottish dairy farmers. Bruce Mackie, Chair of the NFU Scotland Milk Committee, highlighted the risk that some farmers might lose their contracts, even after accounting for voluntary retirements. He stressed the need for careful management of the transition period to avoid disadvantaged farms amid the current volatility in milk prices and contracts.
Objectives Behind the Supplier Cut
Tesco’s spokesperson explained that the reduction is aimed at allowing the retailer to purchase a higher proportion of milk from each remaining farm. This approach is designed to enhance sustainability within the TSDG by consolidating supplies and encouraging the continued adoption of sustainable farming practices. The goal is to create a more efficient and environmentally friendly dairy group moving forward.
The reduction in the number of direct suppliers within the Tesco Sustainable Dairy Group represents a strategic move towards greater sustainability and efficiency. While the full impact on individual farmers is yet to be clarified, the initiative underscores Tesco’s commitment to improving the sustainability of its dairy supply chain.
