Generics

Reporter: David Eccleston

In economic tough times you need every dollar to stretch further. So if you can save money by buying homebrands, you might consider it. Our big supermarket chains know this so they're filling the shelves with hundreds of different generic brands.

Generic brands in the ring and under the spotlight. The two supermarket heavy weights, Woolworths and Coles in a battle for your money and market dominance. They both compete in different home brand categories for every dollar in your wallet.

But how do they match up? What do you get for your money? Does cheap mean poor quality and how many home brands are truly Australian made?

It's a silent war being fought in your supermarket aisle. Brand names knocked out for cleverly packaged private labels - or generics.

Remember a time - if you wanted to save money at Woollies you bought "Homebrand", today, it's a generic brand invasion.

Homebrand, Fresh, Select, Organics, Naytura - all produced by Australia's most profitable supermarket.

Coles package smart buy, You'll love Coles and Coles Finest. They're labels that do big business, about 10 percent of overall sales. Now comes the push to make it more like 25%.

So we randomly chose 80 items to test from salmon to spaghetti, oats to olive oil, cheese to chips. Nutritionist Susie Burrell's brief was to compare them.

"The first thing we're looking at is the relative amounts of carbohydrates, protein and fat because that gives us an indication of the quality of the food. The next thing of course is the ingredient list. We're looking at how much actual product is in" says Susie.

Round one - rolled oats. The 750g Woolworths Homebrand is 99 cents. The fancy Woolworths 'Generic Select' same size - but very different price. $3.99, that's a $3 price hike.

"They're identical products if you check the ingredient list, if you check the nutritional panel you're buying the same thing and paying $3 more for it" says Susie.

While Coles' basic generic range is $1.19, the more expensive 'You'll lLve Coles' is slight bigger in size but how do they justify the $3.40 gap in price - all the oats are Australian made.

Woolworths Homebrand pasta; 59 cents. Woolworths Select; $1.98. $1.39 difference in price, while there's a 70 cent stretch between the two generic Coles pasta.

"It's got exactly the same ingredients. There's no extra additives to it. Nutritionally they're identical" explains Susie.

How about canned peaches. Coles Smartbuy and You'll Love Coles are the same size tins. The cheaper generic is sourced from South Africa, You'll Love Coles from Australia. A $1.50 price difference. Woolies - same price gap.

"One of them has a label on it claiming 'low GI.' Well just because the Woolworths brand put a sticker on it does not mean it's better. Peaches are peaches and there's actually no difference in the percentage of actual peaches in that product" says Susie.

When it came to salmon, a 4 cent difference between the Woolwoths Generics but would you pay 89 cents extra for a pink label at Coles. All sourced from America and all the same.

Similar results for flour too. The Woolworths Organic has less sodium but you pay for the 'Organic' tag and packaging - $2.34 difference. While the flour at Coles is nutritionally identical.

"I think you're paying more for your ego. I have no idea why you'd pay two dollars more for the same flour" says Geoffrey Bowll from Starship Advertising. He is just one of many critics of the big two supermarkets generic label push.

"It's total greed. All they are doing is bludgeoning smaller manufacturers and making more margin for themselves" adds Geoffrey.

With hundreds of new generic products replacing brand names surely that's good for us and for our farmers but look a little closer. Of the 80 products tested a third are imported, whether it's asparagus from China, peaches from South Africa, tomatoes from Italy or french fries from the Netherlands.

NSW University Business Associate Professor Frank Zumbo says "The reality is companies like Woolworths will try to model themselves on companies like Tesco and Wallmart in the United States. Generics are not necessarily cheaper and they're not necessarily of better value."

"Tesco is the dominant UK supermarket" says Robert Clark.

Private labelling came in there thirty years ago, and retail expert Robert Clark says the grocery giant now sells around 55 percent of its own labels, in time we can expect Woolies and Coles to do the same.

"I don't think it will take that long if they go for it, because they've been able to see what has happened in the UK" adds Robert.

So get ready for more of the same, identical products covered in clever marketing, like frozen chips. Same product but a one dollar difference between both Woolies and Coles generic ranges.

"It's pretty obvious that Coles and Woolies are abusing their market power who is the policemen in the room, the ACCC they're not doing anything about it" says Geoffrey.

"They basically have very little credibility they speak utter nonsense, for the most part they miss inform those out there in the public." Pulling no punches, Graham Samuel Chairman of the Australian Competition and Consumer Commission - he defends Woolworths and Coles selling identical products with huge price gaps.

"Because they're not representing that their product is any different, the packaging is different and consumers ultimately detect it" adds Graham.

But fancy paying 30 cents extra for milk when it's no secret it comes from the same cows and how about dishwashing tablets - why spend $5 more, now that's a hard pill to swallow.

In response - Woolworths insists the nutritional profile of a product is only one consideration when comparing products and that they all have different recipes; with many sourced from different manufactures.

We'll leave the last word to nutritionist Susie Burrel who found the Woolworths generic range slightly better in nutritional value, although Coles had more locally made.

"Considering that supermarkets have such control over what is stocked on the shelves and if they're putting their branded products in the key sections of the supermarket and then charging such different prices for it. The consumer has a right to be alarmed" adds Susie.