Consumer

Less product same price. Antitrust monitors shrinkflation

May 28, 2022

The Antitrust Authority is monitoring the phenomenon of shrinkflation, that is, disguised price increases (same price, less quantity). Giovanni Calabrò-director general for consumer protection of the Italian Antitrust Authority (AGCM)-reassures the Italian Parliament.

Shrinkflation, the antitrust spotlight

The Parliamentary Committee of Inquiry on Consumer and User Protection has asked AGCM (Antitrust) whether shrinkflation can be qualified as an unfair business practice under the Consumer Code (Legislative Decree 206/05).

‘Whatmatters is not the reduction per se in the amount of product contained in the package-a prima facie legitimate business decision-so much as the transparency of that change to theconsumer .

In this sense, conduct such as decreasing the amount of product for the same package size, in the absence of an appropriate warning on the front label, could be considered worthy of further investigation,’ Calabrò said. (1)

Shrinkflation, Big Food in the lead

Big Food giants are always in the lead, even in the shrinkflation (or downsizing) occurring in Europe as well as on the American, Asian and Australian continents. From Nestlé to Mondelez, which recently ended up in the eye of the storm for the 20-gram (-10%) cut to the 200-g Cadbury Dairy Milk bar.

Maryland chocolate chip cookies from Burton’s Biscuit Company (UK) increased from 230 g to 200 g, Muller’s Corner yogurts (Germany) from 130 g to 124 g, In the U.S., PepsiCo Inc. reduced the number of Doritos in the bags, Domino’s Pizza Inc. chicken wings in the take-out offering, while Tillamook has ‘shrunk’ ice cream packages (from 56 to 48 ounces).

Marketing techniques

Shrinkflation–from the intersection of shrinkage and inflation–is a seemingly very effective marketing technique. Subject to the risk that discerning consumers will discover the trick and the news will spread, possibly affecting brand reputation as has already happened in England.

In fact, consumers are very much influenced, in general terms, by the price of the sales unit. Especially when they look at products and brands they used to buy. And it is all the more necessary-in this war economy, with inflation at a record high for the past 40 years-to check the fundamentals:

– The price referring to the unit of measurement (kg or liter),

– The quantity (kg and liters).

VIDEO. Shrinkflation is just an outcome out the super monopoly we live in

Old tricks out of control

The shrinkflation phenomenon is not new, although it is often ignored by authorities. As was the case with the substantial doubling of prices, in Italy, at the time of the changeover from the lira to the euro.

In England-already in 2017, in the aftermath of the Brexit referendum-the Office of National Statistics (ONS) reported the downsizing of 2,529 FMCG products.

The Hamburg ConsumerCenter, Hamburg’s consumer association, after all, has been dedicating its ‘Shame of the Year’ contest to shrinkflation since 2014. And in 2021 Mondelez, Mars, and Ferrero were on the podium, as it turned out. (2)

Dario Dongo

Cover image extracted from the video ‘Same price, but SMALLER package! SHRINK-flation Explained’ (Uptin, Turkey, 24.12.21)