Supermarkets are using “copycat” packaging of food brands to mislead consumers into buying private-label products, the Australian Food and Grocery Council (AFGC) warned yesterday (27 November).
The food, drink and grocery manufacturing industry body claims retailers are using similar designs, colours, names and labels of branded products to encourage customers to buy them.
“This copycat strategy could be seen to be confusing consumers into believing they are buying top-selling branded products,” said AFGC chief executive Kate Carnell.
“Although the products may look similar, the taste and quality can be quite different between branded and private-label products.”
She called for the appointment of a supermarket ombudsman to stop supermarkets using packaging that is similar to branded goods.
The AFGC recently released a report which forecasts private-label products could comprise more than 40% of total supermarket sales in Australia by 2020.
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By GlobalDataCarnell claims the growth in private label is making it more and more difficult for Australian manufacturers to get their food and grocery products on supermarkets shelves, resulting in less choice for consumers.
Analysts say Coles and Woolworths Ltd, which control around 80% of the retail market, are both seeking to boost private-label penetration and are intensely discounting them, squeezing food manufacturers.
Earlier this month Will Johnson, CEO of Heinz Foods, spoke about the pressures caused by the growth of private label in Australia in a conference call following the company’s second-quarter announcement.
He said: “In Australia, we are confronting a combination of weak categories, relentless promotional pressure and growing private label, as well as executional issues.”