Tesco has warned suppliers in Northern Ireland that they compete in a global marketplace so must become more efficient as well improve quality.
Cliff Kells, commercial manager for Tesco, told suppliers in the province that they were no longer just competing against other local suppliers and were now fighting against farms in Eastern Europe and factories in China.
Tesco has increased its spending on local sourcing in Northern Ireland to £300m a year, up £40m on 2003.
Michael Bell, executive director of the Northern Ireland Food and Drink Federation, said that while Tesco was to be congratulated on this spend, not everyone had benefited.
He explained: “Global sourcing strategies are producing food price deflation. This poses major competitive issues for our smaller members. These strategies are making the whole regional and local food agenda more challenging.”