The Avonmore Waterford Group (AWG) has agreed to supply beef through its producers' club to Tesco Ireland in an deal worth at least £30 million to beef producers.

The agreement is also expected to clear the way for increased sales of Irish beef in Tesco's British outlets. As part of the deal, Tesco Ireland's 76 stores will now only be supplied with beef from AWG's producers' club or from Gort-based company, the Sean Duffy Group.

The beef producers' club is a scheme operated by AWG which provides a sales and processing outlet for beef producers. The club already has contracts with a substantial number of retailers in Europe.

It is expected 180 producers will be eligible to participate in the contract, although Tesco and AWG plan to treble that in the next two to three months. Tesco Ireland is the Republic's largest retail buyer of beef.

The managing director of Tesco, Mr Maurice Pratt, said the deal between AWG and Tesco would make it easier to get more Irish beef onto the shelves of Tesco stores in Britain.

He said that Tesco in Britain has given a commitment that any imported beef stocked by Tesco's British stores will come from suppliers in the Republic.

AWG's assured beef scheme which incorporates the producers' club, involves a traceability programme where animals can be traced back to where they were born. This is aimed at combatting BSE. All the beef will be processed through AWG's Irish Country Meat plants at Ballaghaderreen, Co Roscommon and Ballyhaunis, Co Mayo.

AWG assists in the purchase of the animals, the supply of the feed rations and the transportation of the animals to the Irish Country Meat plants.

Speaking at the launch, the Minister for Agriculture, Mr Walsh, said it was his understanding the deal between AWG and Tesco meant that Irish beef will be stocked at pre-BSE levels in Britain "very shortly".