1. Trends in Retail Competition: Private Labels, Brands and Competition Policy A Symposium on the Role of Private Labels in Competition between Retailers and between Suppliers The Institute of European and Comparative Law in conjunction with the Centre for Competition Law and Policy Oxford, 9 June 2005 Sponsored by Bristows CCLP (S) 05/05

2. Private Labels and Branded Goods: An Economic and Competitive Comparison by Professor Paul Dobson Loughborough University “Trends in Retail Competition: Private Labels, Brands and Competition Policy” Symposium, IECL, Oxford 9 June 2005

3. Private Labels and Branded Goods – Oxford 9 June 2005 I. Brands v. Private Labels “Horrors” and “Heroes” The different sides to brands and private labels Consumers’ “Real Champions” Desirable brands and private labels Competition Concerns Power to prevent, restrict and distort competition

4. Private Labels and Branded Goods – Oxford 9 June 2005 II. Brand “Horrors” v. “Heroes” Brand “Horrors” The “Blob” The “Giant Octopus” Consumers’ The “Virus” Nightmares Brand “Heroes” The “Protector” The “Pioneer” Consumers’ The “Equalizer” Sweet Dreams } }

5. Private Labels and Branded Goods – Oxford 9 June 2005 III. Brand “Horrors” The “Blob” Dominates a category, smothering all rivals Stops others entering and innovating The “Giant Octopus” Tentacles everywhere to use leveraging power to grow while restricting or killing small brands The “Virus” Infects and takes over all shelf space in a category by proliferating spin-off products

6. Private Labels and Branded Goods – Oxford 9 June 2005 IV. Brand “Heroes” The “Protector” Provides value for money through its scale Provides consistency and quality assurance The “Pioneer” Creates new markets through new products First to innovate when consumer tastes change The “Equalizer” Enters markets to challenge dominant positions Offers standardisation to aid price/value comparisons

7. Private Labels and Branded Goods – Oxford 9 June 2005 V. Private Label “Horrors” v. “Heroes” Private Label “Horrors” The “Blood Sucker” The “Flesh Eater” Brands’ Nightmares The “Body Snatcher” Private Label “Heroes” The “Underdog” The “Adventurer” Consumers’ The “Revolutionary” Sweet Dreams } }

8. Private Labels and Branded Goods – Oxford 9 June 2005 VI. Private Label “Horrors” The “Blood Sucker” Feeds off brands’ success in creating markets Free-rides on brand marketing, formulation, packaging and/or reputation The “Flesh Eater” Kills brands slowly by poor shelf positioning, artificial price differentials, value destroying promotions, deliberate stock-outs The “Body Snatcher” Copies then replaces brands Copycat/clone own-labels and brand de-listing

9. Private Labels and Branded Goods – Oxford 9 June 2005 VII. Private Label “Heroes” The “Underdog” David takes on Goliath Real choice where previously there was little The “Adventurer” Boldly going where no one has gone before Innovative products and new categories The “Revolutionary” Provides value products for the masses Budget lines and generics

10. Private Labels and Branded Goods – Oxford 9 June 2005 VIII. Consumers’ “Real Champions” Brands offering: Guaranteed quality and reliability Price/value comparability Distinct variants to suit different tastes Regular improvement and innovation Private Labels offering: Genuine value (avoiding “marketing surcharge”) Genuine choice (offering alternatives) Genuine variety (filling gaps) Genuine innovation (catering for latent demand)

11. Private Labels and Branded Goods – Oxford 9 June 2005 IX: Retailer Control Over Suppliers Retailers as “Suppliers” Control over Suppliers Retailers as “Competitors” Retailers as “Customers”

12. Private Labels and Branded Goods – Oxford 9 June 2005 X. Consumer Concerns Retailer sovereignty that permits: Deliberate damage to brand value Deliberate restrictions on choice Deliberate cutting corners on PL quality Deliberate lack of PL price comparability Deliberate manipulation of prices and distortion to category price architectures