Australia has one of the most concentrated grocery markets in the world. Woolworths and Coles account for almost 70% of supermarket sales, 60% of alcohol retail, and 40% of all retail in Australia. The more market share they have the more influence they have over suppliers and the easier it is to stamp out smaller independent retailers.
ABC’s Hungry Beast program (March 10, 2010) The Beast File: Woolies & Coles
The Big players
Woolworths is Australia’s largest supermarket operator, and NZ’s second largest. After years of criticism for being Australia’s largest owner of poker machines, Woolworths spun off its liquor retail and hotels businesses in 2021, leaving the poker machines business. Woolworths also operates over 150 Big W stores around Australia. [profile]
Wesfarmers bought Coles Group in 2007 for $22 billion, but spun off the supermarket and liquor business in 2018. Wesfarmers kept Officeworks, Kmart and Target, which were part of Coles Group when it was acquired by Wesfarmers. Coles Group now owns Coles supermarkets; 1st Choice, Liquorland and Vintage Cellars liquor stores; Coles Express (with Shell) fuel & convenience stores. [profile]
Metcash, who supply IGA Supermarkets, accounts for 16% of supermarket sales. Metcash distributes primarily to independently owned stores. They supply IGA, Foodland, Foodworks, 7-Eleven, Lucky 7, BP and several liquor retailers. [profile]
Aldi opened its first Australian store in 2001 and now operate more than 500 stores across Australia. Most brands in store are ALDI owned. Over 80% of products are Australian made. Criticisms of the German parent company includes worker exploitation, and issues with their palm oil supply. [profile]
The supermarket giants have been blamed for Australia having the fastest growing grocery prices in the developed world.
Supermarket owned brands (known as ‘private label’ or generic ‘house brands’) command a 25% market share, expected to rise to 30% in the near future.
‘House brands’ mean big profits for supermarkets and are geared towards customer loyalty by creating products that can only be purchased in their store. Most major supermarkets are trying to shake the poor quality image of generic brands by rolling out their own tiered labelling structure with each tier cleverly marketed to appeal to a different customer base.
As major supermarket chains give more shelf space to their own brand items the ‘name brand’ products are being squeezed off the shelves with only the top selling items remaining. For customers this means less variety, less choice and the disappearance of familiar brands from the aisles. For supermarkets it creates a shift in bargaining power further down the supply chain; Australian farmers and wholesalers have little choice but to sell through the supermarkets’ own brands and are forced to compete with cheaper and often heavily subsidised foreign imports.
The TRUTH About the Supermarket Milk Price War (February 26, 2013)
Information on who manufactures specific house brand products is not commonly available, however the following directory is a list of companies and services that fulfil private label requirements. It gives some indication of who the major suppliers are. Private Label Manufacturers Association directory
Further Key Resources:
- ‘The Future of Food’ special series of articles by The Age newspaper. (May/June 2012). Future of Food
- ABC Background briefing with audio (March 24 2013) ‘Casualties in the supermarket war‘
- Flavour Crusader blog – on milk wars – ‘pull the other one Coles‘
- Flavour Crusader blog – on community battles against ColeWorths – ‘Sticking it to the Big Two‘
What can you do:
- Look beyond the supermarkets for essentials. Find food co-ops, box systems, swap meets near you at Local Harvest.
- Shop at independent grocers and small supermarkets. Search for an IGA near you.
- Choose local, independent Australian owned brands, over generic supermarket house brands.
- If you’re buying a home brand read the label and look for ‘Product of Australia’ and ‘Made in Australia” over imported.