Producers worry that there are even more private labels on the shelves.
The branded goods association reacted cautiously to the end announced yesterday for the Merkur brand and the conversion of the Merkur stores into “Billa Plus”. The move by the owner, the Rewe Group, is understandable in the fierce competition among grocery chains, said Günter Thumser, the managing director of the Austrian Association of the Branded Goods Industry. But one now expects a “fair chance” for branded articles over the private labels.
Fair chance
The brand owners understand this to mean that retailers also place new products from the manufacturers in such a way that the product has a chance – “not somewhere at the top, or immediately next to it a very similar offer 30, 40 percent cheaper”. Then the manufacturer's innovation product would bear the entire development costs, but only serve as a “shoehorn” and used as a template for self-interest. “This is not fair competition,” emphasized Thumser at an online press conference on Friday.
Retailers use completely different criteria when calculating their own brands. The manufacturer brands would have a much higher development effort. “It is of course unfair if you only compare the shelf prices. You should also look at the average price or the manufacturers' promotional prices.” In the case of targeted shopping, the price difference is no longer that big, but only amounts to 10, 15 percent, says the association's managing director.
“Crying eye”
With Merkur, a “very valuable and sustainably built premium brand” will be switched off, according to Thumser. The advertiser Mariusz Jan Demner, who works for the Markenartikelverband, sees Rewe's move “with a crying eye”. His agency works for Merkur, and they helped build the brand. He does not want to comment on the management's decision. “We can only hope that future developments will keep the brands in their status on the shelf, and that they will also be understood as important customers.”
The Association of the Branded Goods Industry is also running its annual campaign this year, aimed at encouraging people to buy branded products. The motto: Better with the brand. Various forms of advertising are used for this, from posters and TV bookings to online games. According to Demner, the gross value of the campaign is over 2.2 million euros in one month. “This will be a very visible campaign,” the advertiser is convinced. Brands are currently in the crisis for trust and security.
