Tesco has hailed the success of its controversial fictional farms brands after reporting ’positive’ and ’encouraging’ first quarter results.
NFU president Meurig Raymond has responded by describing the brands as one of the union’s ’top priorities’ and pledging challenge all retailers which use them.
Tesco, which has endured a difficult few years in store and in the boardroom, reported its UK like-for-like sales were up 0.3 per cent n the 13 weeks to May 28. Its overall group sales were up 0.9 per cent.
The results represented the second successive quarter of sales growth, following three years of decline.
The retailer singled out the growth of its ’exclusive fresh food brands’, which it said were ’performing very well in the UK’.
It said the brands had received a ’strong initial customer response’, and were performing ’in line with our expectations’. Tesco’s volume growth in ‘produce’ and ‘meat’ is outperforming the market by about 5 per cent, the retailer reported.
Tesco chief executive Dave Lewis said the retailer was ’encouraged by the progress we are making’.
He said: "Our new fresh food brands are performing very well, with over two-thirds of our customers having bought products from the new range."
However, while the results are undoubtedly good news for Mr Lewis and signal better times ahead for Tesco, they will only increase the spotlight on the fictional brands, which sparked a storm when Tesco launched its new range in the spring.
Farmers have accused Tesco and other retailers who use the brands of misleading consumers into thinking the food comes from local farms when much of it is actually imported.
Addressing the NFU council in Warwickshire on Tuesday, Mr Raymond said challenging the big supermarkets on their use of fictional farm logos was was a ’top priority for us as an organisation and for the top table’
The NFU president said the union had been involved in some ‘difficult conversations at the highest level with Tesco’ and but stressed it was not alone in its use of the logos.
The NFU has identified Waitrose, with its Duchy brand, Morrisons, Aldi and Lidl as other supermarkets which use the brands on red meat products.
It has commissioned a survey to look into the extent to which the labels are used across the retail sector and hopes to use the results to inform its next steps.
But Mr Raymond stressed Tesco was determined to continue using the labels, despite the backlash, given their popularity with consumers and the contribution they were making towards turning its sales performance around.
NFU livestock chairman Charles Sercombe said: "There is a strong thought out there people are being misled. It is a point of principle that we have got to continue to fight and challenge this."
Cumbrian council delegate Alistair Mackintosh warned the brands could represent the ’thin end of the wedge’. He said the big concern was the labels could compromise the UK livestock sector’s ‘second-to-none’ traceability standards.
A Tesco spokesman said the brands represented ‘the quality specifications which go into every product across the range’ and every product was ‘clearly labelled with its country of origin’.
At the NFU council meeting in April, deputy president Minette Batters revealed the union’s lawyers had been looking into the issue.
A Tesco spokesman said: "We created these brands to represent the quality specifications that go into every product across the range.
"Every product is sourced from a selection of farms and growers - some are small, family-run farms while others are of a larger scale."
Products under the brands, which Tesco describes as 'entry tier products', come from a range of countries. All products are ‘clearly labelled with country of origin on the front of pack’, while the Union Jack is ‘prominently displayed on all British produce’, the spokesman said.
Tesco has made it clear it has no intention of ditching the brands, which have proved popular with customers.
The spokesman said: “Tesco customers are among the savviest in the country and they understand that one farm could not possibly supply Tesco given our scale and the vast range of products that they want to buy from us.”
Tesco said all its beef comes from farms in the UK or Ireland, all its fresh chicken from British farms.