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9 March, 2011

the milk war in Australia

Here in Australia, unlike beautiful Boston or picturesque Quincy, we simply don't have cheap electricity nor cheap groceries, in short, the living cost is pretty expensive here compared to the States. Recently, the two supermarket giants decided to lure customers into their stores by reducing the fresh milk to $1 per litre.

Coles starts with Coles' own brand milk, Woolworths immediately followed with Woolworths' own brand milk. What does that mean? All other brand milk would now suddenly become expensive.

Perhaps a win for consumers if consumers decide to go for store brand milk (i.e. cheap milk), however, the effect could be pretty significant, as such competition can drive other milk industries out of business, and the consumers would have less choice at the end.

Unfortunately, a milk is not a milk in this case. Different brand of milk simply taste different. Also for the reference, the Coles' milk has pretty bad consistence at my month-long testing of all major brands in early 2000. In short, it's like Don's (real) Mountain Dew vs no-name Mountain Dew.

Woolworths has acknowledged that the unusually low fresh milk price may cause consequences and is unsustainable.

For the reference, despite recent price wars on milk, I still buy Pura milk. A certain brand of milk becomes cheaper does not mean that I have to go for that brand, as our good friend Don knows well, different brand means different quality.

Posted by Antony on 9 March 2011 10:13 PM |
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