THE supermarket house brand invasion comes at the expense of true competition and the Aussie "fair go'', writes LESLIE WHITE
It is a clear conflict of interest to have the home team also act as the game's umpire.
Yet this is exactly what happens when supermarkets sell their house brand products against those of their competitors.
Supermarkets make their own rules on the competition's shelf space, pricing and terms of trade.
And everybody can see this is unfair, except the agency supposed to be acting as the umpire - the Australian Competition and Consumer Commission.
Competitor companies are forced to pay supermarkets tens of millions of dollars just for shelf space and the supermarket can up the asking price when it likes.
It can also refuse to place the competitor product at eye level.
If the company refuses the "deal", the available shelf space can be taken by the house brand - "Smart Buy" or "You'll Love Coles" if you shop at Coles, or "Home Brand or "Woolworths Select" at Woolworths - and the house brands often have the advantage of unfair in-store promotion.
Soon everything you buy in Australia will be house brand.
House brand is one of the key platforms in the strategies Coles and Woolworths employ take over retail in this country.
Here's the plan:
- Have the house brand undercut traditional quality brand names by using bargain-basement product. Buy dirt cheap from overseas for, say, $1 a unit, so you can increase your profit margin and sell for, say, $2.20 yet still undercut Australian competitor companies, which - due to paying their workers reasonable wages - are only just breaking even by selling at $3.
- Grow the house brand via its cheaper price and biased in-store promotion.
- Place your own product at eye level and the competitor products either too high to reach or at the customers' bootstraps, and delete some lines which compete at the same price point as your own.
- Increase the house brand's shelf space and push the branded (including Australian owned) products off the shelf.
Supermarkets have done this in dairy - where house brand now makes up half the market - as well as frozen and tinned vegetables and tinned fruit.
Almost all this stuff is now imported.
They've done it in bread, batteries, liquor, meat, cleaning and electrical products.
In the instances the supermarkets don't import their house brand products, it's because Australian companies are making it for little or no profit just to keep imports off the shelves.
Australian companies are forced to rely on their brand lines (which sell for more) to make enough dollars to keep their business afloat.
Meanwhile, their own brand is being pushed off the shelf by the cheaper supermarket house brand, which they are making for the supermarket.
And, of course, now they have less money to pay Australian producers.
This takes wealth from society's grassroots and puts it directly in the pockets of two of the biggest corporations in the country.
The tactics the supermarkets are getting away with come at the expense of fair competition.
In the US, liquor producers and wholesalers are forbidden from having any interest in or influence over retail stores.
This law should be adopted here - and broadened to other sectors.
Laws governing fair shelf space allocation and in-store promotion should be considered too.
In the meantime, a powerful supermarket ombudsman should deal with retailer treatment of competitor companies.
But these are seriously depressing topics.
Go treat yourself to some house brand wine.
Open it with a house brand corkscrew powered by house brand batteries and drink from a house brand glass.
House brand takes no responsibility for wine stains on the carpet or the cold treatment you'll get from your partner the day after.
House brand can, however, sell you some cheap flowers with which to attempt to rectify your mistake.
While you're at the supermarket, grab some house brand asprin for your headache.
- Leslie White is The Weekly Times national affairs reporter
