You know that many familiar brands of groceries are being ejected from Coles and Woolworths supermarket shelves to make way for the burgeoning range of house brands, and you'll realise that these house brands must provide a higher margin to the supermarket than the manufacturer-owned brands. But you may not be aware of the supermarket giants' capacity for market manipulation in this new order.
For starters, the supermarket sets the price for the brands that compete against its own. That alone is huge power in the market. Then it determines which brands stay and which go, and in doing so it selects its own competition. Wow! Might it be tempted to retain the competing brands that are of a lower quality, ridding itself of those of high quality? Then it sets the all-important shelf position and display size and prominence for them all.
I assume everyone knows that Coles and Woolies vary the prices in each supermarket according to the competition or lack of competition in the immediate area. That has been well measured by the ACCC. Now, what do you think the major supermarket companies will do to the prices of house brand products as they manage to reduce the competition for those products?
And whether or not you can be bothered answering that question, tell us of your favourite brands that have been disappeared in the past few years. A few I mention in my column in The Herald today are Monbulk ginger marmalade, McCormick herbs and spices (from all Coles), and others are brands of greaseproof paper, crepe mix, crackers, curry powder, worcestershire sauce, flour and soy sauce.
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