Tesco’s £2bn profits, announced this week, presented “a false picture because the supermarket’s procurement structures for home-produced food are deeply flawed and could soon fracture”, according to National Beef Association chief executive Robert Forster.
He claimed that every UK mainstream beef farmer was turning out cattle for significantly less than total cost, and processors could not help because they, too, were caught in the retail price squeeze.
Forster added: “No one in the beef chain - retailer, processor or producer - is making money.
“But, instead of being frightened at the long-term implications, retailers such as Tesco compound the danger by continuing to offer beef at shelf prices that only just generate a gross margin and in net terms deliver nothing at all.
“At some stage, hopefully soon, Tesco will develop fresh retail strategies that reinforce its commercial connection with suppliers and build in long-term securities.”