More deceptive packages than ever before
Consumer advice center reports “shrinkflation” record
January 18, 2024, 2:08 p.m
Consumer advocates are complaining about more hidden price increases than ever before in German supermarkets. The trade is keeping a low profile and labeling is unnecessary. New legal requirements could better protect consumers from deception in the future.
By the end of the year, a 1000 gram bag of rice pudding still cost 2.29 euros in the supermarket. Then the pack became smaller and more expensive. Since then, customers have had to shell out 2.99 euros for 800 grams. A whopping increase of more than 60 percent. The rice pudding, produced by Euryza GmbH, is just one example of many. Less content for the same or even higher price, the phenomenon is called “shrinkflation”.
The trend is expanding. The Hamburg consumer center reports a record, there are more “deceptive packages” than ever before. In 2023, consumer advocates added 104 new products, and in 2022 there were 76. In total, there are more than 1,000 items on the list. Armin Valet, food expert at the consumer advice center, focuses his search on food and drugstore goods. During the course of the month he will once again choose the deceptive package of the year.
Valet reports a domino effect. One brand manufacturer begins by shrinking a product, and others then follow suit. The approach is popular with manufacturers because customers do not quickly notice the hidden price increase.
Companies: Forced to “pass on additional costs”
Retail experts like Martin Fassnacht and Kai Hudetz confirm the trend. “The costs have risen for manufacturers and retailers. Now the question arises as to how the increased costs are passed on from manufacturers to retailers and from retailers to consumers,” says Fassnacht from the WHU Düsseldorf business school. Hudetz from the Institute for Retail Research points out that with almost 15,000 listed items in a traditional supermarket, the proportion of affected products is comparatively small.
Euryza GmbH justifies the price increase for rice pudding with “significant cost increases along the entire supply chain”. The Oreo popsicles have also shrunk. Since last year, the pack no longer contains four portions of 110 milliliters each, but only three of 90 each, at the same price. Manufacturer Froneri states that they are forced to “pass on additional costs” and points to a “trend towards smaller portion sizes”. Katjes reduced the content of its Yoghurt Gums and other fruit gums from 200 to 175 grams, and the price remained the same. The company declined to comment when asked.
Discounters test labeling
Experts like Fassnacht and Valet also see retailers as having responsibility for this issue. The French supermarket chain Carrefour has been warning about hidden price increases with stickers since September. “The weight of this product has decreased and our supplier’s price has increased,” it said. And: “We are committed to renegotiating the price.” In doing so, Carrefour anticipated a draft law with which the French government wants to oblige the industry to indicate on products if the contents of the same package are reduced. If the Commission has no objection, the decree in France could come at the end of March.
The discounter Netto, which is part of the Edeka Group, has also recently been testing labeling in individual branches. The feedback from customers is positive, they say. The company does not want to answer whether an expansion to all markets is planned. The brand industry is trying everything “to maximize its margins. In addition to disproportionately high price increases, this also includes the trick of shrinkflation,” says an Edeka spokeswoman.
Edeka itself also announced in the fall that it would label corresponding products. “Unfortunately, we don’t know which of our independent merchants took up these templates,” it says. According to the consumer organization Foodwatch, this has not yet happened. A survey in 50 markets showed that none of the retailers made use of it. The Edeka dealers could decide on all business issues themselves. The other retail giants are cautious in their comments. Some point to recent price cuts.
New rules?
Valet expects the number of new cases to decline in 2024 due to weakening inflation. Nevertheless, he calls for labeling and legal requirements to protect consumers from deception. A draft law from the Federal Ministry of Consumer Protection (BMUV) gives him hope. This stipulates that packaging whose contents are reduced without the size of the packaging being reduced in the same proportion should no longer be permitted. The same should apply to packaging that becomes larger without the contents increasing as well.
The German Trade Association (HDE) considers new legal regulations to be unnecessary. Retailers ensure maximum price transparency for consumers by labeling the basic price of a product per kilogram or liter on the shelf. It is said that additional information could overwhelm consumers.
The new packaging regulation is currently being negotiated at EU level. Accordingly, packaging with properties that only aim to increase the perceived volume of the product should no longer be allowed to be placed on the market. It is not yet clear when the laws will come. Until then, consumers have no choice but to take a closer look when shopping.