HayesJupe's Blog

January 26, 2011

Australias supermarket duopoly

Filed under: Uncategorized — hayesjupe @ 6:11 pm

Over the past few days, a story about Australia’s two major supermarkets bringing “down” the price of milk to $2 for 2 litres somehow has been deemed a worthy news story.

For years, coles and woolworths have been pricing their “home brand” products slightly below brand name products, be-it breakfast cereal, frozen veggies or milk.

Most people with a brain are capable of noticing that these retailers already command a great deal or purchasing power and can make or break a brand – due to this, suppliers already need to drop thier pants on price in order to get stocked – an issue for non established brands – and therefore for competition.

In this case, with home brands, the supermarkets are trying to control even more of the supply chain, which cant be good for competition.

Unfortunately – Australians have already flocked to this stupidity in petrol, driving smaller retailers out of the market, reducing competition, and in the end, increasing petrol costs for everyone… just because they save a few dollars in the short term. The likelihood is that those who continue to refuse to look at the bigger picture will also deliver other staple grocery items into the hands of the woolworths/coles duopoly.

Fortunately there are those, such as the wife (who saw me writing this) who “get it”… and will never buy coles brand items… even when coles take all other brands out of the store for a particular product, we will go elsewhere. (which we do by default now anyway)

Here’s hoping that this latest example actually makes a few people think of whats behind the price difference, rather than just blindly accepting a short-term discount.

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