Tesco has relaunched an expanded Tesco Sustainable Pig Group (TSPG), with a pledge to issue long-term support for the producers who supply it.
Under the new contract arrangements, pig farmers will receive a combination of cost of production and market price+ incentives from the retailer.
The move aims to give producers greater stability in pricing and help to support longer-term, on-farm investment.
Tesco estimates that the group, which has been developed in partnership with supplier Cranswick, could be worth at least £670m over its first three years.
The TSPG, which will become one of the largest farming producer groups in the UK, will cover all UK pig production methods and include farms of varying sizes.
It will initially produce all of Tesco’s Finest fresh pork, with the ambition of tripling in size over the next three years to produce all of the supermarket's core fresh pork and sausages.
Tesco said the group will play a significant role in developing its approach to sustainable production, providing a forum for farmers and Tesco representatives to improve welfare and innovation.
Among the incentivised improvements in animal welfare will be a drive to increase the number of farms with ‘enhanced farrowing’, and decreasing stocking densities on farms.
Tesco currently operates Sustainable Farming Groups across a number of supply chains, including milk, cheese, beef, lamb and potatoes.
The groups offer members fair and transparent pricing structures, as well as support to reduce emissions through carbon foot-printing, the retailer said.
Tesco said the reintroduction of the group follows 18 months of continued support for the industry, with the retailer upping the tonnage of British pork used in its sausages, bacon, pork and gammon by 20% during that period.
Ashwin Prasad, chief commercial officer of Tesco said: "Our new cost of production mechanism and bonus incentives will provide real benefits to farmers who will be able to invest in key welfare, sustainability and efficiency improvements.
“Our dedicated British farmers have faced some challenging times recently, and we’ve been doing everything we can to support them."
The National Pig Association (NPA) said it was supportive of the retailer's announcement.
It said: “It demonstrates not only the desire to secure a considerable British supply of pork, but a long-term retail commitment to ensure pig businesses are sustainable and able to reinvest for the future.
“We particularly note the commitment to supporting indoor producers who want to invest in improving welfare and the sustainability of their farms and hope other retailers follow suit.”
