The importance of supporting suppliers in their efforts to source sustainably is something of which we are acutely aware. In 2005/06, having agreed to work towards removing endangered fish species from our stores, we committed to working with suppliers who participate in sustainability research and long-term fisheries management planning. We are aiming to ensure that 95% of our major suppliers are actively participating in relevant research and planning.

Encouraging local producers and supporting British farmers

Our customers increasingly voice a preference for local fresh produce and produce from sustainable or organic sources. Buying from smaller suppliers can also stimulate the local economy. We sold over £6 billion of British products in our stores last year. Encouraging local producers is therefore a key part of our sourcing strategy and we currently stock 3,500 locally produced products.

Last year we established an office in Northern Ireland and conducted local supplier conferences there and in Scotland to identify opportunities to extend local sourcing in these markets. Since March 2006 we have sourced almost 1,000 product lines from Northern Ireland, an increase of 30% since August 2005. This year, we are committed to doubling the products we source locally in Scotland from 500 to 1,000 lines.

Our commitment to sourcing from the UK wherever possible led us to launch our ‘Farm Promise’ milk, which will help British farmers convert to organic standards. In turn this will help us to cope with the rising demand for organic milk, which is forecast to continue outstripping UK supply. This is the first time a major retailer has worked directly with farmers to encourage them to move to organic. We have committed to working with the farmer for a minimum of three years and three months – the longest-term milk contract between retailer and farmer in the industry. Farmers’ costs for converting are being fully covered by a 5p on pack contribution – part of the sales price.

We were behind a defining moment for British crop production. Our tomato supplier has completed a scheme to grow tomatoes 52 weeks of the year, using waste steam and carbon dioxide from a local manufacturer in Teesside, which would otherwise have been released into the atmosphere. From 2006 this will enable tomatoes to be grown in the UK all year round, reducing the need to import foreign produce at a high food-mile cost.

For 2006/07 we are launching an innovative new scheme to make it easier for small and medium-sized suppliers to gain business access to our stores and make their local products available to more customers. The scheme, named ‘Supply Something New…’ and piloted in May 2006, will see top representatives from the supermarket take to the road every two months in a search for new, innovative, large and small UK suppliers. We already use a network of over 3,500 small, local producers and are looking to increase this number over the coming year.