Tesco to hand pig farmers extra £6.6m to help them

Tesco is going to hand pig farmers 6.6 million in additional support, taking the total to 10 m, after warnings that a slew of producers could go out of business.

The UK's biggest supermarket said farmers would get 6.6 million until August, a rise from 3.4 million handed out since March under an accelerated and enhanced payment plan after being criticised for not paying a fair price for pork.

Tesco is one of many supermarkets that hand farmers extra cash in the face of the rising costs of feed caused by the war in Ukraine, after an export slump last year, along with Covid disruption and Brexit-related shortages of abattoir workers.

Four out of five producers would go out of business within a year if their financial situation improves, according to a recent industry poll.

The National Pig Association NPA wrote to Tesco asking for help, as it said the industry had faced an unprecedented crisis over the past 18 months. The price shock caused by the war has turned a very challenging financial situation into a critical one, according to the NPA, where over 100,000 pigs are stuck in farms that should have gone to slaughter, with farmers losing over 50 a pig because of the huge gap between the cost of production and the price that retailers are willing to pay.

It had called on Tesco to act after rivals such as Waitrose, the Co-op, Marks Spencer, Aldi, Asda, Morrisons and Sainsbury agreed to pay more for British pork through their dedicated supply chains.

Waitrose, which is less than half the size of Tesco, has offered 16 m, while Sainsbury s offered 7.8 m.

The NPA chair, Rob Mutimer, said: "We are very pleased that Tesco has responded to our letter to Chief Executive Ken Murphy, with some much needed extra financial support for the pig industry.

This is a welcome boost for pig farmers who are currently facing unprecedented costs of production and need a tangible increase in the price they are being paid in order to stay in business.

We look forward to seeing the pig price go up very soon as a result of this action and hopefully we can stop the flow of producers leaving the industry. Tesco said since January it had taken an extra 32,000 pigs and planned to take a further 22,000 more in the months ahead, as it increased its range of British pork products by 30%.

A farmer will receive an additional 5p a pack of pork from the I Love British brand for bacon and ham, as well as five new British pork options in store.

Dominic Morrey, Tesco's commercial director for fresh foods, said: "We fully recognize 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. He said there was more to do and that we will be working with suppliers, farmers and the wider industry to drive more transparency and sustainability across our supply chains and support the future of the British pig industry. Jim Brisby, a pork supplier at Cranswick, said he was pleased with the progress we have made to increase the availability of British pork to Tesco shoppers, and that we are continuing to work with the team to increase these volumes over the next few months. The increase in prices paid to British farmers will help to support those farmers who supply Tesco.