While private label apologists would have us believe store brands will someday take over from national brands, they ignore the deep pockets many of those brands can bring to in-store promotions.
And in Australia, the large CPG houses are taking the fight to private label outside the marketplace.
HJ Heinz is accusing the country’s two largest supermarket chains, Coles and Woolworths, of creating an “inhospitable environment” for manufacturers, with CEO William Johnson saying consumers will end up paying more or getting less.[1] Heinz isn’t alone, either: bread maker Goodman Fielder has threatened to end daily deliveries to retailers because of cutthroat costs where supermarkets sell bread for as little as $1 per loaf. Japanese-owned milk producer Lion (formerly Lion Nathan) is considering abandoning the territory altogether due to low milk prices (below $1 per liter). The Australian Competition and Consumer Commissionhas raised the possibility of looking into what it describes as the vertical integration of the private label sector.
[1] Source: Sydney Morning Herald.
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