THIS WEEK: Chains squeeze vitamin prices

Supermarket chains, Tesco, Sainsbury and Asda, are increasing pressure on branded-vitamin suppliers to lower prices by slashing the cost of their private-label ranges.

Supermarket chains, Tesco, Sainsbury and Asda, are increasing pressure

on branded-vitamin suppliers to lower prices by slashing the cost of

their private-label ranges.



All three grocers have mounted aggressive pricing promotions, which

have cut the cost of their own-label vitamins by up to 20%.



An own-label bottle of 60 multi-vitamin tablets with iron is now

retailing at pounds 2.19 in Tesco, compared with pounds 4.15 for a

similar bottle from Sanatogen.



The heavy discounting follows a failed attempt by Asda and Sainsbury to

slash the price of Seven Seas and Sanatogen branded vitamins last month.



Both retailers were found to be breaching RPM, the UK’s last price-

fixing agreement, and were forced to stop the promotion after court

injunctions were taken out against them by both manufacturers.



A Tesco spokeswoman said that the current own-label vitamins promotion

was the biggest the grocer had ever run.



‘The action by Asda and Sainsbury created a lot of interest in the

vitamins market and we felt we needed to compete against that,’ said the

spokeswoman.



A Sainsbury spokeswoman said it had supported its vitamin promotion with

national and local press advertising.



‘Asda’s decision to challenge the resale price maintenance created a

different market environment, and we had to respond to that.’



Asda, which sparked off the cost discounting challenge, refused to

comment on the latest move.



See analysis page13



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