Retailers and suppliers are being hit by tough new environmental targets as the result of a new partnership between the industry and the government.

The Food Industry Sustainability Strategy was launched this week by Asda chief operating officer Dave Cheesewright, secretary of state for rural affairs Margaret Beckett and food & farming minister Lord Bach.

Defra wants to see a 20% reduction in carbon emissions by 2010 as well as a "significant" cut in the environmental costs of domestic food transportation by 2012. Beckett's department is also pushing for a 20-25% reduction in water use in the south east and 10-15% in the rest of the UK, while the food manufacturing sector is to cut food waste by 15-20% by 2010.

The first sign of the government's partnership approach is several Champions Groups chaired by industry leaders which will implement the strategy. Cheesewright is heading the group on food transportation which will look at efficient as well as sustainable methods of transportation.

There was limited reference to sourcing of local produce in the strategy, although it did touch on food miles. Cheesewright said that Asda remained consumer-driven on such issues.

Asda's presence at the event marked a bid to promote its green credentials, after Tesco created a £100m environmental fund the day before.

The strategy received input from a group containing "all key food and drink sub-sectors," said Beckett. The group identified the priority areas which are detailed in the document.

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