Tesco commitment good for farmers, says Shakespeares

MIDLANDS law firm Shakespeares says a commitment from supermarket giant Tesco to give farmers two year contracts is a positive step for the industry.

In the wake of the horsemeat scandal, longer-term supplier contracts are likely to become the norm as major retailers take a fresh look at their supply chain management and make change to working practices, the law firm suggests.

Philip Clarke, chief executive of Tesco, the largest purchaser of agricultural produce in the UK, has made a commitment to shorten supply chains and source more food directly from British farmers. Specifically, the supermarket retailer promised that all suppliers would be offered two-year contracts as a minimum.

Peter Snodgrass, partner and agriculture specialist at Shakespeares’ Birmingham office, said: “The move to two-year contracts should be a very positive step for local farmers and food producers, many of whom have on occasions felt under pressure to accept less than favourable terms from major retailers.

“However, changing working practices can bring risks, so it is important that farmers take advice about how to terminate existing contracts and establish new ones, ensuring that the terms agreed are clearly set out and acceptable to both parties.

“With the promise of working more directly with retailers in the future, some farmers may be new to such contractual arrangements and they could get caught out if they don’t get proper legal advice.”