Farmers have accused Tesco of putting Britain’s food security at risk by driving a “race to the bottom on price”, during a tense exchange at the National Farmers’ Union conference.
Ashwin Prasad, Tesco’s UK chief executive, told delegates the retailer is “a business built on partnerships”.
But Joe Stanley, of the Allerton Project, said more than one in three farming businesses lost money in 2024, with many farmers working “for less than the minimum wage”.
He said: “What will it take for the retail sector to accept that its business model – ultimately a race to the bottom on price – is broken at the foundations and will not be able to continue loading all the risk and cost of that cheap food system onto the shoulders of farmers and growers if it wants to survive?
“Or can we expect to see one-kilogram packs of potatoes and carrots literally given away this Christmas?”
Martin Brown of the NFU warned of falling domestic production and added: “Farmers are producing food currently below the cost of production.
"Are you and the other major retailers not worried about the future supply of home-produced food, and what steps are you going to take to change the poor returns farmers receive from the current supply chain?”
Mr Prasad responded that supermarkets operate on “very small margins at volume” and that Tesco’s pricing model is “open, transparent and fair”, adding it only buys meat from abroad “when we’ve exhausted the available [British] supply.”
NFU president Tom Bradshaw said: “What growers need are longer-term contracts to give them that confidence for the future to invest.”