Tesco is offering farmers in the UK a unique opportunity to boost their business by supplying raw material for the expanding British biofuels market.
Tesco Chairman David Reid will today (Tuesday) announce at the National Farmers Union Conference that Tesco – working in partnership with Greenergy Fuels Ltd and Cargill – is constructing a plant to convert rape seed oil into premium grade biodiesel at Immingham, Humberside.
The supermarket, which now sells bio-fuels at over 40% of its petrol stations, is experiencing huge demand for more environmentally friendly fuels and wants British growers to be at the forefront of this new opportunity.
Commented David Reid, "I know that British farmers have often been told that the future lies in diversification but until recently the processing capacity for biofuels hasn’t existed to turn that vision into a reality.
"This plant is a powerful indication of the future importance of this alternative energy source in the UK and it shows that the opportunity is now there.
"There are currently good returns available from oilseeds, but over and above that this a long term opportunity for British farmers to position themselves at the forefront of a global shift towards renewable fuels."
Mr Reid will also tell the conference that the supermarket is working hard with the wider industry to increase opportunities for British growers around value added products such as Finest and Organic.
For example:
Tesco is going to hold a workshop on organic livestock farming, to provide British farmers with fully detailed and costed blueprints on how to convert to organic with an overall aim of 100% UK sourced meat and milk.
With Tesco organic meat and poultry sales up 30% farms that are responding to the demand for these premium markets are successfully growing their businesses. Harry Irwin farms in East Anglia and Lincolnshire supplies Tesco with the majority of their free-range and organic broiler chickens. He has doubled his business with Tesco over the last three years and has put in place ambitious growth plans for the next five years.
The supermarket will continue to work with the British Soil Association to increase the availability of British sourced organic product.
Organic produce sales at Tesco are up 30% and many suppliers such as Glinwell in St Albans, Hertfordshire, are experiencing massive growth. Today, Glinwell is Tesco’s largest supplier of organic produce after they invested in two hectares of heated glasshouses three years ago. The farm now supplies Tesco with organic tomatoes, peppers, cucumbers and sweet peppers and has a turnover of £8 million. They are planning to invest in another 3.5 hectares of glasshouses over the next two years.
Tesco will celebrate British provenance at local and regional level and will feature farmers on all our British meat labels.
Suppliers using a combination of strong product development with joint promotion and marketing initiatives are growing their businesses through their work with Tesco. Joseph Heler, a dairy company based in Cheshire, has developed a range of Tesco branded territorial cheeses and taken their business from 740 tonnes per year using milk from 20 local farms, to 6,300 tonnes per year using milk from 125 local farms.
Tesco will continue to work with British suppliers to identify new products that will drive consumption of British dairy.
Tesco will be launching a new British sourced cholesterol reducing milk within the next few weeks as part of a wider move into new functional markets, such as probiotics.
David Reid said, "We do recognise the challenges being faced by British farmers and accept the responsibility that the retail industry, and we as the leading retailer, have.
"We know that we have a big part to play in helping farmers meet these challenges and seize opportunities for growth. We will play it willingly as it is essential that the UK farming industry remains profitable.
"We’ll do it because it’s the right thing to do, but also because it makes sense for the business".
Notes to Editors
Tesco sells bioethanol blended standard unleaded petrol in 185 petrol forecourts in London, the Southeast and North West
Biodiesel is being rolled out to 150 sites in London and the Southeast
Both products are blended with up to a 5% bio element which conforms to British Standard BSEN228 and BSEN590 and all car manufacturers warranties
Tesco is a 25 per cent shareholder in Greenergy Fuels Ltd
The biodiesel production plant at Immingham will start production at the end of 2006. The £13.5 million plant will produce more than 114 million litres (100,000 tonnes) of pure biodiesel per year and plans are already underway to double this capacity in response to an increasing rise in demand for biodiesel
