Sainsbury's and Tesco to slug it out over organic produce

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A new front in the battle to be the UK's greenest supermarket chain will open up this autumn when J Sainsbury and Tesco go head-to-head with the launch of rival organic vegetable box schemes.

Both groups are seeking to capture a bigger slice of the country's £1.6bn organic food market, which is growing at 30 per cent a year. Sainsbury's will trial its scheme to around 500,000 customers in the East Midlands and East Anglia from the end of August, while Tesco will test its vegetable boxes in south London from early September.

Until now, local farmers have seized the initiative in offering specially selected seasonal produce, leaving the supermarket industry exposed to a backlash against stocking year-round supplies of produce such as asparagus, strawberries and green beans.

In retaliation, the biggest supermarket chains have pledged to source more local and regional products to counter the soaring popularity of farmers' markets. Their fightback comes as the Competition Commission is conducting an inquiry into the UK's £100bn-a-year grocery industry amid fears the top four chains control too much of the market.

Sainsbury's said its organic boxes would aim to support the local food economy although it admitted it would resort to nationwide sourcing if necessary. Tesco intends to source its vegetables from East Anglia in the first instance. But environmental campaigners warned that the supermarkets' push into box schemes could force existing players out of business.

Sandra Bell, real food campaigner at Friends of the Earth, said: "It will be a threat to the smaller, very genuinely local businesses that are running successful box schemes because Sainsbury's and Tesco will be able to undercut them, which could put local farmers out of business."

Sainsbury's first box will offer eight seasonal salad items that will be packed and distributed from a central Cambridgeshire base. It claimed its boxes, which will cost under £15, would be more convenient than conventional schemes because customers could order them alongside their weekly grocery shop. It said the scheme could be extended to include fresh meat and poultry if it was popular and the economics made sense.

Karen Schenstrom, Sainsbury's trading director in charge of fresh produce, said: "This is an obvious extension to our offer, not about trying to put Abel and Cole out of business. Our customers like organic food and want someone to help them select the best seasonal products."

A spokeswoman for Tesco said its box would include a mixture of vegetables, salad and fruit. The selection would change fortnightly. "We think there is a lot of demand from customers for this type of product," she said. Tesco will roll out the scheme nationally if the trial, which will be based from the Croydon store dedicated to handling online orders, is a success.

Both supermarket groups intend to mimic the personal touch that smaller schemes offer by including newsletters telling customers the farm name and region in which the produce was grown along with recipe tips.

Ocado, the online grocer that supplies Waitrose, has tested similar seasonal organic vegetable schemes. Jason Gissing, Ocado's finance director, said: "It's an interesting idea and something we've done from time to time but we have greater demand for other types of organic products."