Discovery could anger Aussies struggling with finances—uncover the details!
- Replies 22
In a world where the cost of living seems perpetually on the rise, Australians are all too familiar with the pinch of their tightening budgets.
From the price of petrol to the weekly grocery bill, every cent counts, and finding ways to stretch the dollar is becoming an art form for many.
So, it's no wonder that a recent discovery in the United States has left many Aussies feeling more than a little aggrieved.
An iconic Australian product, crafted from local ingredients, costs less to purchase 16,000 km away from its origin than within Australia.
Numerous 500ml bottles of Red Island extra virgin olive oil were discovered in a supermarket in New York’s Lower East Side, owned by the family behind Aldi.
The brand is owned by Cobram Estates, Australia’s largest olive oil producer, which holds an estimated 35 per cent of the domestic market.
The price difference is enough to make any cash-strapped Aussie's blood boil.
At a Trader Joe’s supermarket owned by the family behind ALDI, the olive oil costs $11.89.
Yet, a mere stone's throw from Red Island's headquarters in the Victorian town of Lara, the same bottle is priced at $13 in Woolworths.
Coles lists it at the same price, and at IGA, the cost can vary even more widely.
This price disparity raises questions about the factors influencing retail pricing.
Coles and Woolworths quickly distanced themselves from the blame, citing various factors influencing prices, such as taxes, rent, wages, or potentially a better deal from the manufacturer.
‘There are a range of factors that can influence price, and we have no visibility over the costs and pricing strategies of overseas retailers,’ a Coles spokesman said.
‘We work hard to offer our customers in Australia great value and quality, and offer a range of olive oil brands at various prices,’
Woolworths highlighted its assortment of olive oils at various price points but did not specifically address Red Island.
In the US, shelf prices do not include goods and services tax. However, even after adding sales tax at the checkout, olive oil remains less expensive in America than in Australia despite the additional shipping costs.
According to Queensland University of Technology marketing Professor Gary Mortimer, there are a few possibilities.
One is parallel importing, where a distributor purchases a product without the maker's permission.
Another is opportunistic sourcing, where an overseas retailer buys large quantities at low prices.
Cobram Estates’ joint chief executive officer Sam Beaton said that Red Island's presence in Trader Joe’s may result from a 'small trial' or a one-off deal.
‘We started speaking to Trader Joe’s in early 2023, providing both volume and pricing at that time.’ he said.
‘Since then, the pricing in the category has increased significantly, including the pricing of our Red Island 500ml in Australia, which increased in April 2024 from $10.50 to $13.00 on the shelf.’
Mr Beaton explained that Trader Joe's price was fixed at the time of the deal, making it cheaper than the total price in Australia.
If the agreement were made today, he mentioned that the shelf price of Red Island in the US would be higher than in Australia due to the freight costs involved.
Mr Beaton suggested that Australian shoppers may receive a better deal than their American counterparts.
‘Coles and Woolworths run a number of price discount promotions throughout the year – which we contribute to,’ he said.
‘If you compare the weighted average discount on this product – taking into account the promotional prices – then the average price of Red Island in Australia is significantly cheaper than the converted $12 at Trader Joe’s.’
‘Legally, we can’t tell the retailers what price to sell our product for,’
‘Shelf pricing is at the full discretion of the retailer, and of course, different retailers make different margins.’
Retailers have their pricing strategies and margins to consider, and manufacturers like Cobram Estates cannot dictate the shelf price of their products.
It's a delicate balance of supply and demand, market forces, and strategic pricing that can lead to Australians finding their local products cheaper on the other side of the world.
‘We are not selling it at a loss,’ Mr Beaton continued.
Australians have previously been surprised by the fact that essentials are cheaper abroad.
Last year, an Australian living in Germany discovered a bag of 43 Finish dishwashing tablets priced at the equivalent of $14.70, while a similar bag at an Australian retailer was $54 at the total price.
Similarly, a blind taste test featuring 10 Australian olive oils revealed that Cobram Estate emerged as the top choice overall, with Woolworths Australian Extra Virgin Olive Oil recognised for offering the best value.
Mount Zero Organic Extra Virgin Olive Oil, the most expensive option, was hailed as the top pick for its rich flavour and complexity. Read further details about this story here.
What do you think about this price discrepancy? Have you ever found Australian products cheaper overseas? Join the conversation and let us know in the comments below.
From the price of petrol to the weekly grocery bill, every cent counts, and finding ways to stretch the dollar is becoming an art form for many.
So, it's no wonder that a recent discovery in the United States has left many Aussies feeling more than a little aggrieved.
An iconic Australian product, crafted from local ingredients, costs less to purchase 16,000 km away from its origin than within Australia.
Numerous 500ml bottles of Red Island extra virgin olive oil were discovered in a supermarket in New York’s Lower East Side, owned by the family behind Aldi.
The brand is owned by Cobram Estates, Australia’s largest olive oil producer, which holds an estimated 35 per cent of the domestic market.
Australian-made Red Island extra virgin olive oil are sold cheaper in a US supermarket than in Australia. Credit: Coles
The price difference is enough to make any cash-strapped Aussie's blood boil.
At a Trader Joe’s supermarket owned by the family behind ALDI, the olive oil costs $11.89.
Yet, a mere stone's throw from Red Island's headquarters in the Victorian town of Lara, the same bottle is priced at $13 in Woolworths.
Coles lists it at the same price, and at IGA, the cost can vary even more widely.
This price disparity raises questions about the factors influencing retail pricing.
Coles and Woolworths quickly distanced themselves from the blame, citing various factors influencing prices, such as taxes, rent, wages, or potentially a better deal from the manufacturer.
‘There are a range of factors that can influence price, and we have no visibility over the costs and pricing strategies of overseas retailers,’ a Coles spokesman said.
‘We work hard to offer our customers in Australia great value and quality, and offer a range of olive oil brands at various prices,’
Woolworths highlighted its assortment of olive oils at various price points but did not specifically address Red Island.
In the US, shelf prices do not include goods and services tax. However, even after adding sales tax at the checkout, olive oil remains less expensive in America than in Australia despite the additional shipping costs.
According to Queensland University of Technology marketing Professor Gary Mortimer, there are a few possibilities.
One is parallel importing, where a distributor purchases a product without the maker's permission.
Another is opportunistic sourcing, where an overseas retailer buys large quantities at low prices.
Cobram Estates’ joint chief executive officer Sam Beaton said that Red Island's presence in Trader Joe’s may result from a 'small trial' or a one-off deal.
‘We started speaking to Trader Joe’s in early 2023, providing both volume and pricing at that time.’ he said.
‘Since then, the pricing in the category has increased significantly, including the pricing of our Red Island 500ml in Australia, which increased in April 2024 from $10.50 to $13.00 on the shelf.’
Mr Beaton explained that Trader Joe's price was fixed at the time of the deal, making it cheaper than the total price in Australia.
If the agreement were made today, he mentioned that the shelf price of Red Island in the US would be higher than in Australia due to the freight costs involved.
Mr Beaton suggested that Australian shoppers may receive a better deal than their American counterparts.
‘Coles and Woolworths run a number of price discount promotions throughout the year – which we contribute to,’ he said.
‘If you compare the weighted average discount on this product – taking into account the promotional prices – then the average price of Red Island in Australia is significantly cheaper than the converted $12 at Trader Joe’s.’
‘Legally, we can’t tell the retailers what price to sell our product for,’
‘Shelf pricing is at the full discretion of the retailer, and of course, different retailers make different margins.’
Retailers have their pricing strategies and margins to consider, and manufacturers like Cobram Estates cannot dictate the shelf price of their products.
It's a delicate balance of supply and demand, market forces, and strategic pricing that can lead to Australians finding their local products cheaper on the other side of the world.
‘We are not selling it at a loss,’ Mr Beaton continued.
Australians have previously been surprised by the fact that essentials are cheaper abroad.
Last year, an Australian living in Germany discovered a bag of 43 Finish dishwashing tablets priced at the equivalent of $14.70, while a similar bag at an Australian retailer was $54 at the total price.
Similarly, a blind taste test featuring 10 Australian olive oils revealed that Cobram Estate emerged as the top choice overall, with Woolworths Australian Extra Virgin Olive Oil recognised for offering the best value.
Mount Zero Organic Extra Virgin Olive Oil, the most expensive option, was hailed as the top pick for its rich flavour and complexity. Read further details about this story here.
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