Dairy Farmers of Britain's Bridgend, Lincoln and Blaydon dairies, which supplied Localchoice milk to the retailer, were closed last weekend by receivers PricewaterhouseCoopers after failing to find buyers.
That had led to speculation that Tesco would not continue with the product, but the supermarket insisted it still supported the line. "We're committed to Localchoice and it remains in a good number of UK regions," said a spokesman. "We want to retain the important aspect of provenance and we are engaging with potential processors and producer groups to supply even more regions."
At around one million litres a week, Localchoice only represents a small part of Tesco's milk offer in volume terms, but the line is widely seen as a cornerstone of the retailer's local food proposition.
Tesco previously sold Localchoice in 21 UK regions, but has not commented on the extent to which supply has been disrupted. Although DFB helped develop the line, other processors had been supplying some regions, reducing the impact of DFB's collapse. Robert Wiseman, for instance, supplies the south west region from its Bridgwater dairy, while Graham's Dairies is understood to supply Scottish stores.
Suppliers claim Tesco will find a way of continuing with locally branded milk . "There's sure to be some evolution of their offer," said one source. "I've not seen any suggestion at all that Tesco's local support is waning."
Meanwhile a new goats' Cheddar with cranberries from Ashley Chase Estates has won a national listing in Tesco after winning the retailer's annual Cheese Challenge last week.
Butlers' Guernsey Gold, Isle of Man Creamery's Vintage Cheddar and The Durham Cow Cheese Company's Durham Blue each won a regional Tesco listing after triumphing in the soft, hard and blue categories respectively.