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STERLING's 25% PRICE CUT FOR BAYER ASPIRIN LARGE-SIZED BOTTLES

This article was originally published in The Tan Sheet

Executive Summary

STERLING's 25% PRICE CUT FOR BAYER ASPIRIN LARGE-SIZED BOTTLES is effective on Sept. 27. In a Sept. 22 press release, Sterling Health announced that the price roll-backs for Genuine Bayer aspirin in 200-, 300-, and 365-count bottles is retroactive for existing stock. The three SKUs represent "only about 10%" of U.S. sales of Bayer aspirin, the company indicated. The 25% price cut "was recently announced to the retail trade," Sterling said, and will apply to new orders for these three SKUS, as well as be applicable to existing store stock." Sterling said it will make the price cuts retroactive by giving retailers a credit toward future orders of the three Bayer aspirin SKUS. The company indicated that retrospective discounts do not represent an accounting issue for the company since Sterling anticipated the price reduction by allowing retailer stocks to deplete before the announcement. "We are particularly pleased to be able to roll back the prices on our largest sizes of Genuine Bayer aspirin because many of the people who purchase these sizes are the elderly or those who use our Bayer aspirin to treat chronic pain such as arthritis," Sterling Health USA President Doug Meyer said. Sterling is emphasizing that the price cuts are not in response to marketshare inroads by private label aspirin products. Characterizing the private label market as a "different playing field," a company spokesperson said the strategy is not designed to appeal to generic aspirin users. Sterling said it expects the price cuts to lead to increases in sales volume. Meyer added that Sterling "is constantly re-examining all aspects of our operations to be sure that each of our brands provide the best value on the retail shelves." Although the company has "no specific actions planned at this time," he predicted that "this commitment to continuous improvement will lead to additional value-creating actions for our branded products in the future." According to food and drug store data from Information Resources, Inc. subsidiary Towne-Oller, Bayer aspirin's share of the OTC analgesic market fell to 2.3% for the 12 months ended Aug. 30 from 2.7% the previous year on a 14% sales decline. During that time frame, sales of pure aspirin products declined 6%. However, sales of private label aspirin products remained flat, with marketshare dropping one-tenth of a share point to 5.1%.
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