Tesco vows to remove 1 bln pieces of plastic packaging by end-2020

LONDON - Britain's biggest retailer Tesco has pledged to remove one billion pieces of plastic packaging from products in its UK stores by the end of 2020, seeking to reduce its environmental impact and meet growing consumer demand for less waste.

Britons have become increasingly aware of the amount of plastic they use following David Attenborough's "Blue Planet II" documentary which highlighted the dangers of plastic pollution to marine life.

Last year Tesco said it wanted to remove hard-to-recycle materials from its business. It said on Friday it will have eliminated the hardest-to-recycle materials from its own brand products by the end of this year, removing over 4,000 tons of materials from 800 lines. It said it is also working with branded suppliers on this.

Tesco, which trades from 3,787 stores in Britain and Ireland, employing 340,000 people, now plans to remove the small plastic bags commonly used to pack loose fruit, vegetables and bakery items and replace them with paper ones.

It will remove plastic trays from ready meals, secondary lids on products such as cream, yogurts and cereals, and spoons, forks and straws from snack pots and drinks cartons. It also plans to remove 200 million pieces of plastic used to pack clothing and greetings cards.

Tesco has told more than 1,500 suppliers that packaging will be key to deciding which products are sold in its stores. It has informed them it reserves the right to no longer stock products that use excessive or hard-to-recycle materials.

“Our work to remove, reduce, reuse & recycle is already transforming our packaging," said Chief Executive Dave Lewis.

"By focusing on solutions that we can apply across all our UK stores and supply chain, we can make a significant difference and achieve real scale in our efforts to tackle plastic," he said.

In recent years Britain has slashed the use of plastic bags by introducing a 5 pence charge for each one. The government has also considered imposing a "latte levy" on disposable coffee cups which are hard to recycle.

Last month No. 2 supermarket Sainsbury's vowed to halve plastic packaging by 2025, promising to switch to alternative materials and refillable options.

Lewis, who announced last month he would step down next year after 6 years at the helm, repeated Tesco's call for the government to introduce a UK national infrastructure for recycling. 

source: news.abs-cbn.com

British retail giant Tesco to exit US

LONDON - Britain's biggest retailer, Tesco, wrote down the value of its global operations by $3.5 billion and announced plans to exit the United States, as it sought to rebuild after a year in which profit fell for the first time in two decades.

The group, the world's third largest retailer after Wal-Mart and Carrefour, said on Wednesday abandoning loss-making Fresh & Easy in the U.S. would mean restructuring and other one-off costs of 1 billion pounds ($1.5 billion).

Tesco also wrote down the value of its property in Britain by 804 million pounds, reflecting a decision not to develop more than 100 sites, and its businesses in Poland, the Czech Republic and Turkey by 495 million pounds, to account for a sharp slowdown in demand.

Though Chief Executive Philip Clarke hailed Tesco's fourth quarter performance in its home market as its best quarterly outcome in three years, it still represented a slowdown in growth since Christmas, despite a year of huge investment.

"I've been working for Tesco for nearly 40 years and I can tell you this - it already looks, feels and acts like a different and a better business," Clarke told reporters.

"We've closed the gap in the (UK) market, at times we've outperformed it," he said.

Shares in Tesco, up 24 percent over the last three months, were down 3 percent at 1004 GMT, valuing the business at 30 billion pounds.

"Management cannot claim concrete evidence of a UK recovery with these numbers," said Panmure Gordon analyst Philip Dorgan.

"It will take time - retail is detail - but we believe that Tesco is on track and we expect recovery in the UK to slowly emerge in FY2014," he said, adding that Tesco could commence share buybacks in 2015.

Tesco made a statutory pretax profit of 1.96 billion pounds in the year to Feb. 13, down 51.5 percent. It also reported an expected 14.5 percent fall in underlying full-year profit to 3.55 billion pounds, largely reflecting the cost of a 1 billion pounds turnaround plan for its home market, launched after a shock profit warning in January last year.

Earnings were also hit by the impact of the euro zone debt crisis on eastern European markets, restrictions on store opening times in South Korea, and the Fresh & Easy losses.

Fourth quarter sales at British stores open over a year, excluding fuel and VAT sales tax, grew 0.5 percent. Though at the top end of analysts' forecasts it was worse than growth of 1.8 percent recorded in the six weeks to Jan. 5.

Tesco's fightback plan for Britain, where it makes over 60 percent of revenue and profit, has focused on more staff, refurbished stores, revamped food ranges and price initiatives - all aimed at reversing years of underinvestment and halting a loss of share to rivals like J Sainsbury and Asda.

The group also said it had increased a provision to cover the possible miss-selling of insurance products at its Tesco Bank to 115 million pounds.

U.S. RETRENCHMENT

Following the U.S. retrenchment and reassessment of its UK property plans, including a scaling back of sale-and-leasebacks, Tesco now expects to deliver mid single digit trading profit growth, a return on capital employed within a range of 12 to 15 percent and dividend growth broadly in line with underlying earnings.

Fresh & Easy, which trades from 199 stores and employs around 5,000, has absorbed over 1 billion pounds of capital since its 2007 launch when Tesco was run by Clarke's predecessor Terry Leahy but has never turned a profit in a market where it competes with the likes of Trader Joe's and Wal-Mart.

"When I became CEO I really did give it all that we had but in the end I'm responsible to investors and I know I can deliver more to them by leaving that I can by staying," said Clarke.

He had put the venture, which contributes just 1 percent of group turnover, under review in December, saying an exit was likely.

Chief Financial Officer Laurie McIlwee said Tesco had received "a lot of interest" in Fresh & Easy, both for the whole business and parcels of stores.

"What we're most interested in is those buyers that are interested in buying the complete business," he said, noting that a clean sale would remove redundancy and onerous leasehold issues.

He said Tesco would not conclude the process for at least another three months.

The group is paying a maintained dividend of 14.76 pence.

source: www.abs-cbnnews.com

Horse DNA found in burgers at second major Irish plant

DUBLIN - Burgers containing horse DNA have been discovered at a second major plant in Ireland, the country's agriculture department said on Monday, again pointing the finger at Poland as the country of origin for the raw materials.

Food companies such as Tesco and Burger King last month found that beef products supplied by an Irish firm contained horse DNA, a scandal that has hit retailers with a wave of bad publicity and left Ireland's 2 billion euro ($2.7 billion) beef industry reeling.

Results of tests on a Polish meat ingredient at Ireland's Rangeland Foods, a supplier of frozen burgers to restaurants, caterers and pubs including local fast food chain Supermac's, contained 75 percent horse DNA, the agriculture department said in a statement.

"This isn't a huge surprise, it's another depressing saga that has put Irish food in the headlines for all the wrong reasons," Irish Agriculture Minister Simon Coveney told national broadcaster RTE.

"It's not a surprise to me because this is the same product that has been going into Silvercrest," he said, referring to the plant run by Ireland's most powerful beef baron Larry Goodman, the first whose burgers were found to contain horsemeat.

Coveney's department said Rangeland has suspended production pending the outcome of an investigation and the company has indicated that none of the products, which were imported through a meat trader based in Ireland, had entered the food chain.

Rangeland, based in the northern county of Monaghan, exports burgers to Britain, Sweden, Spain, Belgium, the Netherlands, Greece and Cyprus. Coveney said the product containing the horse DNA was destined for the catering industry outside Ireland.

LEGAL ACTION

Initial tests on burgers produced by another Irish company, Liffey Meats, also tested positive for low traces of horse DNA, although further tests came back clear.

The minister said the only two other burger manufacturers in the country had both confirmed they have not used any Polish products, and that their products are 100 percent Irish sourced.

He has also asked the police and the fraud squad to join in the investigation and said the government would take legal action against those responsible if necessary.

Silvercrest - a subsidiary of Europe's largest beef exporter ABP Foods which is based just 6 kilometres (3.7 miles) from Rangeland - has lost its contract to supply both Tesco and Burger King with burgers.

Burger King, one of the most popular fast food chains in Britain and Ireland, said last week its affected burgers never reached any eateries. Tesco withdrew a number of products from its shelves, including one sample where horse meat accounted for about 29 percent of content.

Smaller retail chains Aldi, Lidl and Iceland have also sold beef products found to contain horse DNA.

Poland's veterinary authority found no signs of horse meat in samples from five slaughterhouses that were sending beef to Ireland and is awaiting results from the sixth, state news agency PAP reported on Friday.

Food safety experts say horse DNA poses no added health risks to consumers, but the discovery has raised concerns about the food supply chain and the ability to trace meat ingredients.

source: abs-cbnnews.com