Slim odds of home brand war here
Date: 24 Nov 2011
As a row brews over the growing dominance of private label products in Australian supermarkets, industry players in New Zealand say there is only a slim chance the same will happen here.
Across the Tasman the giant Coles and Woolworths supermarket chains reported plans to more than double the number of private label - or home brands - on their shelves. That's caused Heinz, one of the world's biggest food manufacturers, to call Australia the "worst market'' globally to deal with,and an environment "inhospitable'' for suppliers, the Sydney Morning Herald reported.
The debate spiked even further with the release of an Australian Food and Grocery Council report which forecasts private label in Australia could potentially account for 40-50 per cent of total supermarket sales by 2020.
Katherine Rich, chief executive of the New Zealand Food & Grocery Council which represents manufacturers and supplier in an industry with $15b in retail sales, is comfortable private label here (estimated to be 15-16%) won't grow much further.
"But I think there will be a very different outcome here because Foodstuffs (New World, Pak `n Save, Four Square) and Progressive work hard to maintain good supplier relations and they know a forced march towards higher percentages of home branded products will burn relationship capital.''
"All food companies know, certainly in the long term, that if home brands dominate the shelves this will have an impact on issues such as R&D spending, and innovation,'' said Rich.
FOODSTUFFS
Pams is the largest selling brand in the New Zealand grocery market with some 2500 product lines. Its other private label brand is Budget with 450 product lines.
PROGRESSIVE
Its range includes Homebrand, Value, Countdown, Finest, Select, Essentials, Signature Range and Macro Wholefoods.
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