Same product, but different packaging and price. Private label supermarkets cause more price confusion – News

As with the always confusing discount calculations in stores, this causes prices to fluctuate wildly. On the face of it, it benefits people, but it introduces a lack of transparency and therefore instability into the pricing policy. In addition, according to grocers, the chains can affect the quality of the products.

If a customer has ever felt that private label food tastes the same as a more expensive brand name product, it may not be just a feeling. The practice, where one product is packaged in two different packages and sold at significantly different prices, is common, according to some. These are often dairy products, but also others.

“This is nothing new and it is happening more and more often. It is also common with cookies, meat products or even beer. There, they are often common, well-known brands of industrial breweries, just with a different label,” Tomáš Maier, an economist from the Czech University of Life Sciences, told Novinkám.

The retail chains declined to comment on the matter when asked by Novinek. Billa said only that she does not deceive the consumer by offering her private label products.

Despite the risk of bad relations with supermarkets, only the aforementioned dairy responded to the milk product manufacturers that were contacted.

“It is normal that the composition, I say, of the majority of products produced under private brands is the same as the composition of products under the brands of the manufacturers. These are identical results. The difference in price is the result of the chain’s business strategy,” said Zdeněk Bukovjan, business director of Mlékáren Valašské Meziříčí.

The dairy is famous for its kefirs and yogurt, which it also produces for some private chain brands. Complete agreement regarding manufacturing, composition and nutritional information can be found in selected kefirs. Where agreement is not reached, however, is the price, which is often more than a third higher for a branded product than for a private label.

“All manufacturers are limited by the minimum for each product batch, but not all customers are willing to accept it. That is why they prefer custom made products. Chains try – and we are no different here in Europe – to offer successful products under their own brands. It is entirely up to the customer whether he chooses a branded product or one under the chain’s private label,” Bukovjan explained.

However, the composition of some products differs by a tenth of a gram in fat content. So it is a question whether it is worth rebalancing the product lines because of such differences, or whether it is a reason for the product to be tens of percent more expensive.

Dairy products for private supermarket brands are produced by dozens of other, often well-known, companies. However, the customer does not always find the manufacturer on the package.

This is voluntary information from the supermarkets. And so some can hide the similarity of the products by writing only “Made for:” on the product so they can change the manufacturer at any time.

Apparently, this is not a violation of the law, which the Ministry of Agriculture agrees with.

“It is a common practice that consumers can choose from different brands or packages, while it may be the same product. But that in itself is not against the law. It’s up to the company to set the price,” confirmed Martin Pitron from consumer group dTest.

According to him, however, a problem can arise from the point of view of the protection of economic competition if supermarkets are abusing their position on the market and putting smaller producers at a disadvantage.

“The result could then be creating a monopoly or oligopoly, which could set prices and other conditions in the market as a result of little competition,” Pitron said. ‘ in an oligopoly with a limited number of firms that completely dominate the market.

Food manufacturers point out the downside of branded products. “Private brands are increasingly presented as branded products offered by chains at a consistently low price. In reality, however, they discriminate against traditional branded products in a way. They put a bigger markup on them so they prefer their private brands,” said chamber spokesman Marek Zemánek.

“The composition of the two products is, for the most part, completely identical,” he said.

In addition, supermarkets often place their private brands in more advantageous positions in their stores. “For many manufacturers, it has a critical level. They either take out and deliver what the chain wants, or the supermarkets throw them away,” said Zemanek.

“We know from many of our members that some chains are reducing orders or making it dependent on buying branded products for private brands. In addition, shops often change their requirements and dictate how the packaging, writing and especially the price of the product should look. So it can be said that chains determine the quality of food with their requirements,” concluded Zemánek.