UK supermarket giant Tesco has been roundly criticised by farmers and food producers for reportedly asking suppliers to agree to a wave of price cuts as it steps up its battle with German discounters Aldi and Lidl.

Last week, trade magazine The Grocer reported that Tesco had given its suppliers a deadline of 10 July to agree to shift to its “everyday low pricing strategy”, which will see the retailer use less promotions in favour of permanently reduced prices.

After some difficult years, Tesco’s business has gone from strength to strength, with profit margins back to highs of 4.4%

“We are committed to open, fair and transparent partnerships with all of our suppliers,” a Tesco spokesperson said. However, farmer groups in the UK have criticised Tesco, saying the supermarket giant is “fixated” with driving down prices to unsustainable levels.

After some difficult years, Tesco’s business has gone from strength to strength, with profit margins back to highs of 4.4% – more than double where they were just a few years ago. The company recently reported first quarter sales of £13.4bn (€15bn), which was up 9% year-on-year thanks to booming grocery sales during the COVID-19 lockdown.