Farmers threaten Tesco blockade in prices row

The militant Farmers for Action group has threatened to put Britain's biggest retailer out of business unless Tesco relaxes its pricing structure.

The farmers group has warned Tesco that it is ready to incite the biggest mass action since the fuel protests of September 2000 by blocking the retailer's five national distribution depots.

The threat comes just days after Tesco's chief executive, Terry Leahy, was knighted for his services to food retailing. The FFA said yesterday that unless Mr Leahy agreed to meet farmers' representatives by 8 January, it would begin indefinite blockades of the company's freight depots, stepping up action that started last month.

David Handley, the head of the FFA, criticised Tesco's uncompromising stance on pricing compared with rival supermarkets. "If they thought they'd seen anything before Christmas they haven't seen anything yet. We'll put them out of business," he said. A Tesco's spokesman said it was "sympathetic to the pressure that farmers were under due to low market prices but that Tesco was not responsible for their hardships".

He ruled out a meeting with Mr Leahy, pointing to the chain's producer clubs as an appropriate forum for any discussions.

"We have nothing to give the FFA. We do not set farm gate prices and we do not control the economics of the market place in which we operate," said the spokesman. Last year Tesco made profits of more than £1bn and it is expected to make more than £1.2bn this year.

Mr Handley, a dairy farmer who represents "several thousand" farmers, described Tesco's meetings as unconstructive. He drew a comparison with other chains, such as Sainsbury's, which had tried harder to find a dialogue. "We're talking about minuscule amounts of money that are nothing to the consumer. Safeway recently lifted the price of retail milk by 1p, which goes a long way to help us," he said. Tesco's shares gained 2.25p to 251.25p.