'Phantom Brands' by Supermarkets Displacing Aussie Produce

Supermarkets are using 'phantom brands'—private-label products designed to obscure the presence of Australian produce—resulting in local items being pushed off shelves. This strategy involves creating store brands that dominate shelf space, which can crowd out genuine Australian products. This practice impacts both the visibility of local produce and the market for Australian farmers, affecting consumer choices and local agriculture.

Frozen peas are a common household item, typically found in the freezer among ice-cream and fish fillets. While browsing the supermarket freezer aisle, you might notice "Australian grown" labels on home-brand products from major retailers. However, if you look at the next shelf, you'll find a new contender with 'farm' in its name, priced at nearly half the cost. Upon examining the packaging, you'll discover various countries of origin listed on the back.

Further inspection reveals these peas are also from Coles or Woolworths, the supermarket giants themselves. The Emergence of 'Phantom Brands' For years, retail marketing expert Louise Grimmer has observed the rise of what she calls "phantom brands" in major supermarkets.

"Supermarkets have increasingly developed their own product ranges without clearly indicating they are owned by Coles or Woolworths," Dr. Grimmer explained. "They create a brand that's not truly a brand, hence the term 'phantom brand.'" Dr. Grimmer noted that these phantom brands are managed by supermarkets and serve as a middle ground between the cheapest private-label products and pricier national brands.

In the case of peas, Woolworths' Bell Farms and Coles' Four Farms options are priced about half of the home-brand varieties, making them more appealing as household budgets tighten. This allows supermarkets to benefit even as consumers choose cheaper alternatives. "This strategy is about market share," Dr. Grimmer said. "It's also about creating the illusion of choice for consumers. In reality, at least two of the pea products on offer are owned by the supermarket itself."

Dr. Grimmer acknowledged that while it's fine for consumers to choose less expensive food options, phantom brands could limit the availability of local products. "There’s actually less choice in many product categories," she said. "These aren't genuine brands; they're not made or sourced locally, which poses a risk for suppliers."

Impact on Pea Farmers

The market for imported peas is expected to grow after Coles ended its eight-year contract with vegetable processor Simplot, which supplied Tasmanian peas for its private-label brand. Tasmania is the sole producer of Australia's green processing peas.

Simplot informed its farmers that pea-growing contracts would be reduced by approximately one-third due to declining consumer demand and an excess of inventory from the previous season.

This reduction is from 26,000 tonnes to around 17,000 tonnes. The company plans to explore international markets for some of the upcoming season's pea production. Simplot did not respond to requests for comment. Tasmanian farmer Will Green, who has been growing peas near Cressy for 25 years, expressed his surprise at the cuts.

"They were entirely Australian grown," he said. "We believe our product is among the best and hope that Australian consumers support it."

"Many farmers are struggling, and this decision doesn’t help." Despite shifting to imported peas, Coles stated its commitment to sourcing Australian-grown vegetables for its frozen range. The company explained, "To maintain supply during unpredictable weather, seasonal changes, and other supply chain issues, some frozen vegetables are sourced overseas."

"This approach helps us provide consistent availability for customers who are increasingly opting for frozen vegetables due to their affordability, convenience, and reduced food waste." Woolworths confirmed it continues to source its frozen peas from Simplot.

Production Costs and Market Competitiveness

The practice of using imported produce in private-label brands isn't new. However, substituting Australian peas with imported ones concerns Richard Shannon, executive officer of the National Farmers' Federation. He attributes such decisions to profit motives.

"Maximizing shareholder value drives supermarket behavior," he said. "It’s not necessarily about supporting Australian agricultural industries but about profitability." Shannon argued that the farming sector needs greater government support to remain globally competitive. "While there's talk of expanding Australian horticulture through exports, we first need to secure our domestic markets," Mr. Shannon said. "The government should ensure our production costs stay competitive on the global stage."

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Source: abcnet‍