Friends of the Earth released a report accusing Tesco of breaking the Ethical Trading Initiative code of conduct, to which it is a signatory, by pushing payments to suppliers to below subsistence levels in South Africa and Latin America. The report draws on evidence compiled by Oxfam and fair-trade campaign Banana Link.
Peter Lundgren, founder of the independent farmers' campaign Farm, questioned the Tesco board about the pressure on UK farmers to reduce prices. Lundgren said: "We got some great responses and feedback from ordinary shareholders in and outside the hall, showing that we had tapped a well of consensus. It's time for the supermarkets as a whole to see what they can do to make sure everyone in the supply chain gets a fair share of the profits."
Tesco has 27 per cent of the food retail market, making it the largest of the big four supermarkets. Chief executive Terry Leahy claimed that the problems faced by UK farmers and suppliers were due to European Union agricultural policies and world market conditions.
Farm and Friends of the Earth are part of a coalition of campaign groups, 'Breaking the Arm Lock', launched earlier this year, which is demanding that Tony Blair follow through on his pledge of two years ago to break the 'hold' that supermarkets have on suppliers.
The Competition Commission is currently auditing the practices of the UK's big four supermarkets.
In February, the Office of Fair Trading reported that most farmers feared reprisals from the supermarkets if they complained, and that the voluntary Supermarket Code of Practice, introduced in 2001, was not working.
A Tesco spokesman said that the company maintained a dialogue with all its stakeholder groups, including the significant campaign groups, on the suppliers' code of conduct and other CSR issues.