A rationalisation of Tesco’s potato supply base will see two leading providers join forces.
Branston and QV Foods, which supply two-thirds of the retailer’s potatoes, around 245,000 tonnes, have signed an agreement that will see Branston manage the Tesco accounts of both companies.
The two companies said the move will bring significant improvements to the supply chain and reduce costs.
Duncan Worth, QV director, said: “QV has a considerable investment in supplying Tesco, and this agreement is the best way to protect that investment for our growers, our staff and our company.
“We know that change is inevitable, and we have concluded that it is best approached in a professional, rational and organised manner.”
He said the agreement safeguarded the company’s Tesco-dedicated growers and the QV factory would continue to pack a fixed proportion of the total potato offer until 2008 when QV’s Tesco volume will transfer fully to Branston.
QV will continue to develop and supply Tesco with prepared potato products.
Graeme Beattie, Branston’s managing director, said: “QV has high-quality suppliers and modern production facilities. These will complement our own supply base and will enable us to offer an improved service to Tesco while allowing all parties to benefit from economies of scale.”
Tesco senior buying manager, Roy Maynard, welcomed the development, saying that the creation of one principal supplier would simultaneously reduce operating costs and retain dedicated growers and skills in the Tesco supply base.
“It also sends a positive message that rationalisation can be carried out in an orderly manner without disruption to growers or the customer,” he added.
