Asda is planning to launch an extended range of own label medicines in the Spring. The range will increase from 17 to more than 50 products. It will also include own label versions of Seven Seas and Sanatogen, two of the vitamin brands included in Asda's initial challenge to the price maintenance agreement on non-prescription drugs in October. The prices are expected to be more than 15 per cent below those of branded products.
Boots said yesterday that it would continue to support price maintenance on medicines. It also said that it had cut prices via a three-for-the- price-of-two campaign on the Boots brand of vitamins.
Other retailers were refusing to say how they might react to Asda's latest initiative. Superdrug said it already had a lower priced range of own label products but would be "keeping an eye" on the situation.
Sainsbury said Asda was simply copying other supermarket groups in the move towards more own label products which attract a higher margin. Around two thirds of Sainsbury's sales are own label compared to just 34 per cent at Asda.
The City appeared unmoved by Asda's challenge. Asda's share price remained unchanged at 110.5p while Boots and Kingfisher, which owns the Superdrug chain, registered marginal declines.
The price maintenance agreement covering over-the-counter medicines has stood for 25 years but is now the subject of an Office of Fair Trading review after Asda's campaign.
Asda started its campaign by cutting the prices of around 80 vitamins and minerals by up to 20 per cent. But it ran into trouble when manufacturers successfully applied for an injunction.Reuse content