The Australian Food and Grocery Council (AFGC) has accused Coles of shrinking its overall product range and aggressively promoting its private label products, resulting in a loss of consumer choice.
The claims were made today as Coles announced its biggest single round of price cuts since its "Down Down" campaign began.
AFGC CEO Gary Dawson said research conducted by Deloitte Access Economics and based on Coles' own data found the supermarket’s product range dropped by 11 per cent, from 62,000 products in mid 2010 to 55,000 in mid 2012.
“A loss of 7000 products from a supermarket’s overall offering is a significant reduction in the range of choices available to consumers,” Dawson said.
“These figures confirm what shoppers report anecdotally – that they often can’t find their favourite products on the shelves any more when they go to the major supermarkets.”
“The latest aggressive campaign by Coles to promote their private label products is a sign that this trend will continue.
“This is a classic Trojan horse tactic – disguising a longer run loss of choice for consumers. And as the range of choices drops, so does competition, raising the risk that in the longer run supermarkets will have more market power to increase prices at will to protect already high profits.
“The thousands of suppliers that make up Australia’s $110bn per annum food and grocery manufacturing industry rely heavily on the major supermarkets to get their products to consumers.”
Coles announced today that it has cut the price of more than 100 products for a minimum of six months. It has also expanded its dollar-a-litre Coles brand milk and one-dollar Smart Buy bread offer to include its Coles Express outlets.
Price cuts range from 8 per cent to 32 per cent and include Coles brand bread, chilled juices, olive oil and Camembert cheese.
In a press release, Coles merchandise director John Durkan reassured customers that suppliers would not be negatively affected by the price cuts.
“Helping Australian families make ends meet is our top priority but we know that customers want to know that lower prices for them does not mean suppliers get squeezed,” he said.
“Coles has invested tens of millions of dollars in these price cuts which should benefit Australian suppliers as orders increase.”
Gary Dawson, chief executive of the Australian Food and Grocery Council
