Private labels in rural retail good value or gets what you pay for?
Andrew Dinniss National Private Label Manager
As a rural business owner, running a farming operation is about managing input costs, maximising returns on outputs in fickle markets, all the time with an eye on the weather.
Part of managing input costs is ensuring that any product used on your animals or crops gives you the best value for money. The product may not be the cheapest, but gives you the results that you want, and may come with additional products or services that make your job easier.
Over the last few years, your rural retailer such as Elders will likely have been giving you more options of private label animal health products such as the Pastoral Ag range that can reduce cost and improve value for your farm. However, can you trust them vs offerings from Multinational Animal Health companies? To answer that, we need to look at two areas, firstly the formulation of the products, and secondly where they are manufactured.
In Australia, the government has provided a streamlined registration route for products that have the same formulation as those already registered. Using this route, a company has to demonstrate that their product is identical to the original, satisfy the regulator that the API (Active Pharmaceutical Ingredient) being used meets specifications and is registered, and that the site of manufacture of the finished product is also registered (more on that in a minute). This avoids lengthy and costly animal studies that only demonstrate what should be obvious anyway. This route has allowed numerous competitive products, and whole ranges of private label products to appear on the market when patents have expired. The result, more choice and reduced prices for farmers. However, what about the quality?
In this part of the world, there are limited choices for toll manufacturing of animal health products, and chances are that the private label or generic products are manufactured in the same facility as multinational brands. These facilities must meet government standards (GMP) which includes the facility and equipment, but more importantly the quality assurance (QA) program that oversees it. They must pass audits at least every 2 years (depending on a number of factors) to ensure standards are met. Further, manufacturing for multinational companies requires meeting often more stringent QA requirements, which lifts quality standards and systems across all production in the facility. So private label products such as Pastoral Ag, which are manufactured by toll manufacturers in Australia, are of a very high standard, passing quality control checks and balances before release for sale to the market.
So how can they be cheaper? Let’s be honest, private label suppliers such as us don’t spend as much money on sales force, technical support teams, marketing campaigns, R&D or offices in expensive city locations. This enables savings to be passed on to retailers and ultimately to you – the farmer.
While there are always many that value the offerings of the multinational animal health companies, particularly innovative new products, the market share of Private label products has been growing over the last few years and will continue to do so as patent protection expires, and private label ranges such as Pastoral Ag grow, offering more choice to Australian farmers. Keep an eye out for the growing range of Pastoral Ag products with a new improved look available exclusively in Elders branches.