WOOLWORTHS has upset its biggest and most important suppliers with a marketing campaign pitting its Home Brand private label range against some of the most popular food brands.
This week, Woolworths installed marketing material on shelves of its stores comparing the price, quality and country of origin of its Home Brand lines with products made by Kraft, Unilever, Nestle, Goodman Fielder and other food giants.
Analysts believe Woolworths' move is primarily aimed at countering rising competition from discount retailer Aldi and Coles, which has been discounting heavily, The Australian Financial Review says.
However, the campaign has triggered a flurry of angry phone calls from food suppliers to Woolworths' head of supermarkets, Greg Foran, and to the Australian Food and Grocery Council (AFGC), which represents Australia's largest food and grocery companies.
"Manufacturers are concerned. It would be hard to see what it achieves that unit pricing doesn't," AFGC chief executive Kate Carnell said yesterday. "We'd obviously be concerned if the point of the exercise was to undermine brand leaders."
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