Perthshire potato supplier Taypack Potatoes has walked away from a reported £32 million a year programme with Asda, due to returns it decided were unsustainable.

Taypack Potatoes is one of Scotland’s largest potato growers and employs 220 people at its Inchture base. It produces nine per cent of the UK’s potato output and sells around 80,000 tonnes a year to Asda.

However, the prices Asda was willing to pay had made the relationship untenable, said the company. The Herald reported that Taypack explained the decision as "an attempt to protect the long-term sustainability of the company and its growers".

Taypack also stated that it is entering "a period of consultation where it will review its current business structure, including the possibility of redundancies".

George Taylor, Taypack’s chief executive, said: "The current contract expired on May 1. However, Taypack has presented a two-year proposal, based on the true cost of production, which will deliver sustainability and stability to all parties.

"This is with Asda for consideration and our door remains open."

Also in The Herald, Asda spokesman James Maxton is quoted as saying: "They (Taypack) were asking over and above what was possible. That does not necessarily mean that we were squeezing prices. All our existing suppliers have been happy to fill the gap, so there won't be any shortages."

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