At the artisan end of the bread scale Berry baker Jelle Hilkemeijer, who specialises in organic sourdough, did not expect the supermarkets’ cheap bread to have much impact on his sales.
He did however say he thinks moves like this were never good for the industry.
“It doesn’t reflect what goes into making bread,” he said.
“Nobody is making money selling bread that cheap, they’re using it to compete against each other.”
Mr Hilkemeijer said it comes back to quality and the fact that individual bakers have control over the quality of the ingredients that go into their bread.
“They can control the market they’re aiming toward by differentiating from the big businesses,” he said.
“At that price you can’t compete, you have to differentiate.
“We only do organic sourdough and we do get tremendous support from loyal long-term customers.
“I’m sure lots of small bakers would get that too and that’s what you have to hold on to so you maintain that loyalty.
“It just means the small guys have to work harder at what they do well and the things they can do differently,” he said.
Woolworths’ managing director of Australian supermarkets and petrol, Tjeerd Jegen, defended the bread price cut, saying it was the start of a range of savings that would make a big difference to family budgets.
Woolworths – stung several months ago by reports it was increasing prices on low-profile groceries – followed up within days by announcing lower prices for mince, carrots, nappies and long-life milk.
Independent senator Nick Xenophon called for the reinstatement of price discrimination laws to prevent suppliers from offering customers different prices for similar quality products, while Baking Association executive officer Tony Smith said the major retailers were “bastardising the industry”.
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