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Conflict Grows Between Manufacturers & Retailers as Private Branding Expands

2012/02/18 | 548 views |  | Permalink | Source

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These packs of instant noodles have been privately labeled by a major retailer in Korea.
As the so called "white-soup" instant noodles gained popularity nationwide, this supermarket decided to sell this product for less than other branded noodles.

[Interview : Yoo Mun-hee, Seoul resident] "It is new so I want to try it out. The quality of the products seems similar but it's cheaper".

And it's not just processed food that large supermarkets buy and sell under their own brand names.
They also market fresh food and even blankets and televisions as their own.
Ten years after introducing private label products into the market, the sales of such products at Korea's three largest retailers E-Mart, Lotte Mart and Homeplus now account for over a quarter of their total sales.
Those same retail heavy-weights plan to raise this to 40 percent,.. to take advantage of the larger profit margins.
Manufacturers say they're caught in the middle.

[Interview : Manufacturer] "We know that producing private label products won't be profitable but we just do it because retailers will put our products on isolated display stands if we don't".

As the war of words grows between manufacturers and retailers products with in-store labels continue to attract consumers always looking for a bargain.

Hwang Ji-hye, Arirang News.

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