Wednesday, 20 October 2010

Why consumers benefit from grocery Unit Pricing

Australian consumer advocate, Ian Jarratt, says consumers benefit from unit pricing (pricing per unit of measure) on packaged grocery items.

I am a volunteer advocate with the Queensland Consumers’ Association in Australia. I believe that, because a good unit pricing system can provide so many benefits for consumers, consumer organisations in places where there is no unit pricing should now begin campaigning for its provision and for high standards.

Unit pricing makes it easier for consumers to make informed decisions about ‘value for money’, for example, to choose between cornflakes in cartons if:
480g of Brand A costs $7.60 per kg
775g of Brand A costs $7.10 per kg
but
500g of Brand B costs $6.40 per kg.

Unit prices are provided in addition to selling prices and help consumers overcome the confusion created by the ever-increasing number of package sizes, brands, products, types of packaging, and product forms on sale. Consumers who use unit prices can save significant amounts of money and time.

The provision of unit pricing varies greatly around the world. In some places, provision is compulsory and there are usually legislated standards. But, where provision is voluntary, normally there are no, or only minimal, legislated standards and the extent of provision varies greatly. Depending on the system in place, the quality and usefulness of unit pricing for consumers can vary enormously.

In the European Union, some parts of the United States, and now in Australia, supermarkets are required to provide the unit price of packaged grocery items as well as the selling price.

Since December 2009, large supermarkets in Australia must provide the unit price of most pre-packaged grocery items.

The Australian system is a result of a lengthy campaign by several Australian consumer organisations, including Consumers International members, Australian Consumers Association (CHOICE), and the Consumers Federation of Australia. Most supermarkets strongly opposed the concept and refused to provide unit prices even voluntarily.

During the campaign I visited parts of the USA and Europe to study the diverse systems in use there to report on the best system for Australia. A copy of my report is available here.

I have discovered there are many places where existing compulsory and voluntary unit pricing systems are sub-standard and believe that consumer organisations there should be campaigning for improvements.

Some examples of sub-standard practices are: unit prices that are very difficult or even impossible to read; provision for only some sizes and brands within a product type; and use of more than one unit of measure within a product type.

A critically important standard is that unit prices on shelf edge labels should be very prominent and very easy to read - for example as displayed on the label from the USA in the photo of tinned salmon (above).

Consumer advocates currently involved in, or wanting more information about grocery unit pricing can contact me at unitpricing@australiamail.com. Currently, I am assisting consumer organisations in Canada (Option Consommateurs, Quebec) and New Zealand (Consumer NZ).

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