'Customer choice' behind home brand popularity: Coles

The company's merchandise director John Durkan told a senate inquiry on Tuesday that sales for home brand products had risen strongly over the last four years.

But he insisted "customer choice" was behind the popularity of home brands rather than a deliberate strategy by Coles to increase sales.

"Our strategy involves increasing all of our sales of which home brands is just one part," he told the committee sitting in Canberra inquiring into the food processing sector.

Home brand products, like milk and bread, weren't being given better positions on supermarket shelves or being oversupplied.

"The way we apportion our space is based on how much volume we sell of a particular product," Durkan said.

"As you can imagine, our whole aim is to be in stock for our customers.

"We don't have enough room to over-space products."

Even though home brands had seen "double digit" growth over the last few years, branded products still represent over 75 per cent of overall Coles sales, he said.

"Our strong view is that customers will ultimately decide what level of private label products they will buy."

Meanwhile, Woolworths came under heavy criticism for not making a submission into the inquiry.

"I do want to express my disappointment about your engagement with the inquiry," committee chair Liberal senator Richard Colbeck said.

"I don't think you've done yourselves any favours at all, to be honest."

The retailer's head of trade relations Ian Dunn apologised but said Woolworths was not part of the food processing industry.

"We're downstream from that industry - we're customers of that industry," he told the inquiry.

"We certainly obviously partner and work with that industry but we have no special insights into the industry because we're not part of it."

Liberal senator Sean Edwards dismissed Dunn's claims as "nonsense".

"You know every margin of every producer that supplies to you, Dunn," Edwards said.

"In the wine industry, you are participant in it - you actually own the packaging of it.

"You know every bit about the supply line in the food processing sector."