House brands produced for the major supermarkets are often controversial, and milk has been a particular target ever since Coles began selling its own store-brand milk for $1 a litre back in 2011, a move Woolworths quickly matched. Two years later, market data suggests that a less than quarter of the milk sold in those supermarkets is a store-branded product.
Australian Food News reports that Roy Morgan Research data shows 22 per cent of milk sales in the year to March 2013 was store-branded products. That was down from a peak of 26 per cent for Woolworths and 24 per cent for Coles. In other words: store brands are the biggest sellers in those chains, but collectively other non-store brands sell more.
When Coles introduced the bargain milk back in 2011, the Australian Competition and Consumer Commission investigated whether its pricing tactics were anti-competitive, and concluded that they weren't. The current market data suggests that the cheaper milk hasn't come to dominate the sector, but that doesn't mean the lower pricing might not create pressure on other suppliers to lower their prices to at least appear competitive.
While Coles emerged unscathed from that round, the supermarket sector is still carefully scrutinised by the ACCC. This year Coles has been penalised for not identifying imported vegetables accurately and taken to court for allegedly claiming bread baked in store when it was actually cooked elsewhere. One common objection to store brands is that they're often imported rather than Australian produce, but that doesn't apply in the fresh milk market.
With milk, it isn't as simple as a "supermarkets versus everyone else" scenario. Earlier this year, Coles signed a 10-year deal with dairy supplier Murray Goulburn to provide its store brand milk. Under that deal, as well as selling its own brands, Coles will begin selling Devondale-branded milk under an exclusive arrangement. I can't see why anyone would pay more for the premium brand, but current sales data suggests I'm in the minority.