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Shrinkflation: When Price Increases are Hidden Behind the Packaging
Consumer advocates are calling for the labeling of indirect price increases caused by less content sold at the same price.
The Hamburg Consumer Advice Centre and the Foodwatch organization have called for the labelling of products that are sold at the same price despite having less content. Such hidden price increases were hardly recognizable for consumers, but were now commonplace in supermarkets, explained Foodwatch.
One example of a hidden price increase, known as shrinkflation, is the current “Cheat Pack of the Month November 2023” declared by the Hamburg Consumer Advice Center: At first glance, the Gutbio fennel tea sold by Aldi appears to be cheaper at €1.19 instead of €1.49, but the pack now only contains 20 tea bags instead of 25. In addition, the content of each bag has been reduced. All in all, the price increase amounted to 50 percent, Foodwatch explained.
Record Number of Consumer Complaints
Another example: Danone has reduced both the contents and the packaging of a yoghurt alternative but has left the price the same. According to Foodwatch, the difference between a 500-gram pack and a 400-gram pack is barely noticeable in the store.
“Food companies and retail chains are exploiting inflation to increase their profits and deceive consumers,” explains Manuel Wiemann from Foodwatch.
The Hamburg Consumer Advice Center and Foodwatch are calling for products with less content to be labelled. The Federal Ministry for the Environment, Nature Conservation, Nuclear Safety, and Consumer Protection (BMUV) recently published a key issues paper on reducing packaging waste. According to this, it should be forbidden to reduce the content of products if the packaging does not also shrink. The initiative is a step in the right direction, but is still not enough, say consumer advocates.
Brazil and France are among the countries that are actively tackling shrinkflation. Brazil requires shrinkflation to be labeled on packaging so that consumers are warned of the price increase.
French Economy Minister Bruno le Maire has announced a law against shrinkflation. The supermarket Carrefour is already starting to use stickers to draw attention to shrinkflation before the law comes into force.
Claus Paal, President of the Stuttgart Region Chamber of Industry and Commerce, recently warned in an interview with FACHPACK360° against the introduction of such mandatory labeling in Germany. “Will our customers then have to provide evidence every time they change the packaging? Even if the alterations are technically justified?” asked Paal, who is also a packaging expert. “We have educated consumers. Everyone decides for themselves what they buy. That’s why we don’t need to abolish the last remnants of entrepreneurial freedom combined with entrepreneurial risk,” he said.
At the end of August, consumer protection organizations in Germany reported a record number of complaints about hidden price increases. Increasingly, suppliers were making products more expensive by selling less content in largely familiar packaging, according to the Hamburg Consumer Advice Center and Stiftung Warentest.
Legal Situation Allows Leeway
Although the manufacturers’ practice is generally not illegal, as the consumer protection organizations emphasized at the time, it is “extremely non-transparent.”
Double bottoms, thick outer sleeves, cartons that are clearly too large: in packaging, food is often surrounded by a lot of air. The legal regulations are vague and allow a lot of leeway.
At present, there is only a guideline from an administrative directive. It states that packaging should not contain more than 30 percent air. However, there are exceptions for cases in which there is no deception. For example, if the packaging is transparent, has a viewing window or the contents can be felt from the outside.
A study commissioned by the Federation of German Consumer Organizations (vzbv) shows that a waste volume of up to 1.4 million garbage cans could be saved in Germany every year if manufacturers were to dispense with oversized packaging. Stricter laws could reduce some packaging by up to 27 percent, which would not only benefit consumers but also the environment.
