Generic Promotion in the Food Marketing Chain

  • 45 pages

  • Published: 11 Aug 2008

  • Author(s): Freebairn, John, Goddard, Ellen, Griffith, Garry

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Generic advertising has been a widely-used marketing tool of many agricultural industries, both in Australia and overseas. In recent years, the strategy has come under increasing scrutiny, especially by levy-paying producers who fund the advertising. Also, for many food products, supermarket chains have developed and advertised their own “store” or “private label” brands in competition with both processor brands and generic advertising of those products. In such an environment, the issue is whether generic promotion will increase producer returns or will it just be a waste of money? Farmers gain from a generic advertising program only if the net farm price rises, where the net farm price is inclusive of the levy collected to fund the generic advertising program. The higher net price to farmers increases producer surplus, or the returns on farmer-owned land, management, labour and other resources which are in limited supply. The aim of this project was to examine the conditions under which an increase in the net farm price is likely to occur.