Shift in Tesco food policy could impact on producers
TESCO has bowed further to investor pressure and pledged to boost sales of healthy food and drink across its entire retail group, amid calls to help tackle the UK’s obesity crisis in a move that could have a lasting impact on farmers and food producers.
A consortium of investors, led by responsible investment group ShareAction, cheered a “landmark victory” after Tesco widened the scope of its healthy food promise to cover not just its UK and Ireland operations, but also its Central European business and wholesale supplier Booker Group.
The seven investors, representing around £140 billion in assets, had filed what was thought to be the first nutrition-based shareholder resolution in February, calling on the retailer to cut its reliance on junk food for sales growth. The policy, which includes a commitment to boost the sale of plant-based ‘meat alternatives’ by 300%, has already come under fire from farmers and rural campaigners, however.
Mo Metcalf-Fisher, head of press at the Countryside Alliance, said the way to pursue environmentally friendly objectives was to provide a “buoyant market for ethically produced meat from British farmers, not offer a wider selection of mung bean burgers”.
In a blog, Mr Metcalf-Fisher wrote: “No one is arguing consumers should not have the right to select products based on their personal dietary preferences, but those choices should be based on a real understanding of their environmental impact.
“It is my belief that the vast bulk of the public will continue to lead meat-inclusive diets and they will opt for the real thing, so long as they understand the social and environmental benefits of choosing sustainably produced British meat.
“What absolutely cannot happen is for supermarkets like Tesco to blindly opt for the worst possible option, which would be to offer a choice of fake meat while continuing to offer imported meat products from unsustainable systems.”
In March, Tesco responded to its investors by committing to a “major new programme of reformulation” to improve the health profile of its products by 2025. It set goals to increase sales of healthy products as a proportion of total sales to 65%, up from the current level of 58%.
The investor group had kept up pressure on Tesco to expand its commitments, keeping its resolution on the table for the retailer’s summer annual general meeting, but it has now withdrawn the resolution thanks to the latest commitments from the supermarket firm and said it will engage with Tesco over the next two years as the retailer puts them in place.
ShareAction said it was a “landmark victory for shareholder activism on health issues”. Louisa Hodge, its engagement manager, added: “By filing a shareholder resolution, our investor coalition sent a strong message to Tesco and to other supermarkets that shifting sales toward healthier options is important.
“Tesco’s new ambition to support healthier diets through its UK and Central European stores, as well as through the Booker Group, is very welcome.” If passed, the resolution would have forced Tesco to disclose what proportion of its overall food and soft-drink sales are made up of healthy products. It would also have required the chain to develop a strategy to significantly increase the ratio of healthy to junk food sales by 2030.
The issue of setting out a healthy food strategy was raised at Tesco’s 2020 AGM, ShareAction said, but the retailer refused to commit to making changes. It said the resolution was a “marked escalation” in pressure from shareholders, due to growing concern about big retailers’ actions and public health.
Tesco plans to change its ready meals so at least two-thirds of them contain at least one of the recommended five pieces of vegetables or fruit that people should eat each day. Sarah Bradbury, group quality director at Tesco, said: “These new commitments will ensure that every customer – wherever and however they shop with us – will have even greater access to affordable, healthy and sustainable food.”