Supermarket brands

Coles and Woolworths have launched new ‘private label’ ranges.
 
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  • Updated:4 Mar 2006
 

03.Does it matter where your food comes from?

There’s a lot of argument about it, but buying ‘Australian’ to support local producers or for the good of the country’s economy is a simplistic way of looking at a complex situation. Australia functions and trades in a global market, and (without going into the lengthy arguments here) there’s not a lot of strong evidence for the argument that a groundswell of consumer demand for Australian products would stimulate manufacturing, create jobs and benefit the whole economy. Other local and international factors are likely to have a stronger influence on the economy than how we fill our supermarket trolleys.

'Australian-owned' or 'Australian-made'?

On top of this there’s the whole question of whether Australian-owned or Australian-made matters more. With the falling cost of manufacturing, where a company spends its revenues, pays its taxes, employs its staff, etc, can have a bigger impact than where its products are sourced or made.

Add to that our confusing and imprecise country of origin labelling and you have a shopping minefield that makes it very hard to make a properly informed choice anyway.

Origin v value

From a consumer viewpoint, too, focusing on where a product comes from is a distraction from the main issues. To choose Australian regardless of the quality or price means you risk spending more than you need to, giving unearned profits to producers who find they can sell on their Australian-made (or owned) status, regardless of value.

To keep the market honest, when you’re buying, first decide which products are of the type, quality and price you want. When you’ve narrowed your choice to those, then pick an (apparently) Australian product over an imported one if that’s your preference.

The overseas supermarket scene

Compared with 28% in Britain, well over 20% in most European markets and 16% in North America, Australia’s private label share of the market is so far relatively small. But with Coles modelling its private label strategy on supermarkets like Asda and Tesco in the UK, it’s likely to increase.

Walking into Tesco you’re confronted with a sea of private label products — no wonder, when its private label products are up to 50% of the total. For practically every product that’s on the shelves, there’s a Tesco-branded variety in at least one of its tiers. Not only does it have a budget range (TESCO VALUE), mid-range (TESCO) and premium range (TESCO FINEST), it also offers ranges for the health-conscious (TESCO HEALTHY LIVING), the carb-conscious (TESCO CARB CONTROL), kids (TESCO KIDS), customers with allergies or intolerances (TESCO FREE FROM) and an organic range (TESCO ORGANIC).

Could this be the kind of branding spree we’ll find in our supermarkets in the next few years?

 

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