TESCO SEEKS TO REAP MORE ORGANICS PROFITS

JAMES FALLON

LONDON (FNS) -- Tesco PLC wants to get more out of organics.

The United Kingdom's largest food retailer has launched an initiative in some of its stores to boost sales of organic fruit and vegetables by pricing the traditionally pricier produce the same as nonorganic product.

"We believe more of our customers want to buy organic produce," said Tim Mason, Tesco's marketing director. "But they don't like having to pay more than the going rate."

Tesco has increased the number of organic produce lines it carries to about 30 from 10. It also has grouped all its organic produce together in one area of the stores with prominent signage differentiating it from the nonorganic lines.

The company said the pricing initiative follows consumer demand and research developed by pro-organic groups in England that showed growth in the category has been hindered by higher prices.

Tesco executives hope their initiative will help resolve another thorny problem: how to guarantee the availability and quality of a product supplied by mostly small growers, a Tesco spokesman said.

"We wanted to address all three issues in one go," he said. "We think if the price goes down, we can increase the volumes and more suppliers will be interested in the category." The trial is being run in about 100 of the company's stores in southeast England and will continue through 1997.