By James Davey
LONDON (Reuters) – Tesco shareholders will vote on a resolution at this year’s annual meeting calling for Britain’s biggest food retailer to set targets to increase the proportion of healthy products it sells.
The supermarket group is the first company in the FTSE 100 index to be hit with an investor resolution on health grounds, responsible investment group ShareAction, who are co-ordinating the move, said on Tuesday.
“With severely obese people three times more likely to be admitted to intensive care with COVID-19, the pandemic has highlighted the urgency of tackling mounting obesity levels,” it said.
ShareAction has previously targeted Barclays and HSBC on climate change.
The Tesco resolution is being co-filed by institutional investors including Robeco, JO Hambro and Guys and St. Thomas’ Charity, as well as 101 individual Tesco shareholders.
They argue that though Tesco is the UK’s largest groceries retailer with 27% of the market, its efforts to encourage healthy eating lag behind peers, including Sainsbury’s and Marks & Spencer.
They also said consumer trends and new regulations to combat obesity present a financial risk to Tesco if it fails to take action.
The special resolution requires 75% of shareholder votes cast at the meeting to pass.
If passed, Tesco would be forced to disclose the share of total food and non-alcoholic drink annual sales by volume made up of healthier products and develop a strategy to significantly increase that share by 2030.
If the resolution receives 20% or more support, Tesco would have to issue a formal response detailing how it would address the concerns raised.
“We are working hard to make it easy for our customers to make healthy choices, and we have set very clear targets on health and sustainability, published in our Little Helps Plan,” Tesco said in a statement.
It said a reformulation programme had removed more than 50 billion calories from its products since 2018, its “helpful little swaps” events offer healthier alternatives to family favourites at the same price, and it had given away over 100 million pieces of free fruit to children.
It said it had also announced a target to increase sales of plant-based meat alternatives by 300% by 2025.
Tesco’s annual general meeting (AGM) is usually held in late June or early July.
(Reporting by James Davey; Editing by Cynthia Osterman)