Labelling Characteristics and Demand for Retail Grocery Products in Australia

Abstract

This paper examines whether labelling characteristics affect short-run demand for manufactured foods in Australia. We estimate the effect of common labelling characteristics on demand using data from 92 brands in 12 product categories from major supermarket stores across Australia over the period 2002 to 2005. We find that certain characteristics - such as whether the product is made from recycled materials, certified as being Australian-made, is a private label product, is health-conscious or supports a charity - have a positive effect on demand. However, being an environmentally-friendly good had a negative impact on demand as did products which offer the chance to win a prize and uncertified Australian-made goods.