Australian supermarket operators Coles and Woolworths have recently added home brands to their shelves, which elicited negative comments from global food manufacturer Heinz and other branded food producers.

The launch of the private food labels, seen as a move by retailers to capture a larger share of the shrinking consumer goods market, have boosted the sales of Coles and Woolworths.

The home brands are seen as a boon to both consumers with lower prices and shareholders with higher dividends.

Heinz, however, complained that its branded items are being pushed out of grocery shelves in favor of the home brands or given not so prominent shelf space such as ankle- level shelves.

The practice has led Heinz Chief Executive William Johnson to call Australia's supermarkets as the worst market to deal with for not being hospitable to brands.

"In Australia, we are confronting a combination of weak categories, relentless promotional pressure and growing private label, as well as executional issues," The Sydney Morning Herald quoted Mr Johnson.

It is the third time in 2011 that Heinz criticised the two supermarkets for their practices after similar complaints were aired by Heinz executives in August and June.

It is not only Heinz which has complained of stiff competition posed by the home brands. Goodman Fielder, the country's largest bread maker, threatened not to delivery daily to supermarkets to cut cost and because it could not match the lower prices of home brands such as bread that sell as low as $1.

Retail analysts estimate that home brands enjoy 15 to 20 per cent penetration rate in Australia, which is actually lower compared to 50 per cent of all sales in British supermarket chain Tesco.

Woolworths earlier announced it would double private label sales at its chains despite the complaint of Heinz and other branded food manufacturers of unfair competition.

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