This paper considers the competition effects of lookalike products, which seek to mimic the packaging, design and appearance of leading brands. Such products, most notable in the fast-moving-consumer-goods (FMCG) sector, are particularly associated with items promoted by retail organizations as part of their private-label programmes. The market power and control over the supply chain which the major retailers now enjoy means that by developing lookalike products they may have the opportunity to exploit unfairly and anti-competitively the image and goodwill that brand manufacturers have developed through careful and continual product and marketing investment. This, in turn, could distort the way and the extent to which manufacturers compete, enhance retailer control over the supply chain. In the process, this could undermine manufacturer branded goods which smaller retailers traditionally rely on, thus weakening their competitive position and resulting in further concentration of retail markets and less choice of store types and product varieties for consumers. The continuing absence of a rapid and effective legal remedy to prevent the rewards from brand investment being misappropriated by imitators means that such action will likely continue, with the upshot that manufacturer and retailer competition may be distorted to the detriment of consumer welfare and the public interest.
- Lookalike products
- Private label
- Market power
- Consumer welfare
This paper revises and updates a previously titled paper by Dobson (1998b) (“The Competition Effects of Look-alike Products”, University of Nottingham Business School Discussion Paper, No. 1998: VI, 1998).
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For details on the legal position in a range of countries and a wide array of examples, see Phillip et al. (2013).
For instance, Dobson (1998b) points to a notable case where following the introduction of a series of lookalike products resembling the cleaning product Flash in 1986, and after inconclusive court proceedings, Procter & Gamble re-packaged their product in 1992. This in turn was mimicked within 1 year. Further new packaging was introduced by P&G in 1994, again to be mimicked—for the third time. Similar tacking can be spotted when examines another P&G product—Head and Shoulders.
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Dobson, P.W., Zhou, L. (2014). The Competition Effects of Lookalike Private Label Products. In: Gázquez-Abad, J., Martínez-López, F., Esteban-Millat, I., Mondéjar-Jiménez, J. (eds) National Brands and Private Labels in Retailing. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-07194-7_2
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