Retail interests must always be linked to consumer demand, said Sir Terry Leahy, chief executive of Tesco who described retail as the 'most ferocious market force in existence.' His keynote speech at this week's Food Production and the New Trade Agenda conference focused on global trade liberalisation and local issues.

'The best by-product of the World Trade Orgnisation discussions could be to accelerate EU common agricultural policy reform, making it more market and consumer orientated, thus reducing the risk of subsidised surpluses disrupting world markets,' said Leahy.

He also believes that establishing quality standards on a global scale is desirable, that it is often more complex than imagined and poses several questions.

' I know from years of experience of dealing with regulations that the devil is in the detail and the application,' he said. 'How would such standards be set? How can we prevent them being turned into camouflaged trade barriers designed to block trade on spurious grounds, or insufficiently based on actual business practice and so adding to the costs? How are they going to be policed without creating a bureaucratic obstacle-course for suppliers and retailers, and benefiting only standard-setters and standard-checkers.' Leahy also detailed Tesco's approach to local sourcing. 'Many consumers put a premium on fresh locally grown traceable products. Organic food is a case in point,' he said.

We aim to sell £1 billion worth of organic foods in our UK stores by 2006.' He also said the store is cutting imports of fresh produce because UK growers – such as new potato and strawberry producers – have been able to adopt new production methods outside traditional seasons.