The Tesco Sustainable Dairy Group (TSDG) has announced it will reduce the number of dairy farmers directly supplying the retailer for its own label fresh milk.
The TSDG, which was established in 2007 and now has roughly 400 farmers, explained that the decision will affect 'a small number' of dairy farms.
Those affected will be given 12 months’ notice, it said, with further details expected to be announced next month.
The TSDG is the first supermarket aligned contract and is the largest group of dairy farmers working directly with a retailer in the UK.
NFU Scotland Milk committee chair, Bruce Mackie said the news would "likely see some Scottish dairy farmers lose that contract even after those who opt to voluntarily retire from production are taken into account."
"We will use our network of members to assess how the decision will affect them and how we can assist," he said.
“Given the current fluctuation and uncertainty around milk prices and contracts, it is imperative that the affected farms are not disadvantaged during the 12 months’ notice period.”
A Tesco spokesperson said these changes will allow the retailer to buy a higher proportion of each farm’s milk, while also encouraging farmers to continue to adopt sustainable farming practices.
“These improvements will result in a more sustainable dairy group for the future," they added.
