SuperValu, which recently deposed Tesco Ireland as the largest grocer in the State by market share, makes much in its marketing of its relationship with local food suppliers. It sounds as if Tesco is not yet prepared to cede this turf to its rival.
Tesco on Wednesday launched its annual Tastebud initiative in conjunction with Bord Bia. This is a mentoring programme with the ultimate aim of getting Irish suppliers listed with Tesco.
The supermarket giant also launched a detailed report by Indecon economic consultants on its contribution to the Irish food industry.
The Indecon report concludes that the wider Tesco group is the largest buyer of Irish food and drink in the world, with purchases of €1.57 billion. This puts it well ahead of other big buyers of Irish food products, such as McDonalds, which sources beef here.
Alan Gray of Indecon says that Tesco Ireland accounts for close to €600 million of the purchases. Referencing the remaining €980 million sold to Tesco stores abroad, Gray reckons Tesco accounts for more than 11 per cent of all Irish food and drink exports.
Tesco Ireland’s commercial director, John Paul O’Reilly, insisted that the local operation of the group acts as a promoter of Irish food and drink exports to its sister operations in other countries, predominantly the UK.
With the relative weakness of the euro against sterling, the attractiveness of Irish products to Tesco’s buyers in Britain is likely to increase for as long as the currency remains undervalued versus the pound. Another opportunity for Ireland Food Inc?
O’Reilly suggested that Tesco plans to make more noise about its contribution to the Irish food and drink industry.
“We’re going to talk to our customers more about this, and about the Indecon report,” he said.
Tesco, which is beginning to find its feet at a corporate level after an annus horribilis due to an accounting scandal and lost market share, was never likely to take its toppling by SuperValu in Ireland lying down.
As one of the planks of its strategy, shouting that “we are the biggest buyer of Irish food and drink in the world” isn’t a bad option.
