Shrinkflation hits the market

Consumers who buy certain goods, like a popular brand of margarine, for example, have been in for an unpleasant surprise over the past few weeks: When they open the package, which on the outside seems almost identical to the one they used to buy before, there is considerably less product inside. Quite a few consumers reportedly dismissed this as a mistake in the production of the product, but many lodged complaints with the store’s manager, fearing that the smaller quantity was a consequence of insufficient maintenance.

Had they paid more attention to what the package said, they would have seen it now reads 200 grams instead of 250g, or 400g instead of 500g, for example. The size of the package has not changed, since that would cost the production company more, as changing two digits on the label is much easier.

Worse, consumers are also paying a lot more money for less product. On March 1, a few days after the war broke out in Ukraine, the average price of the margarine in question (pack of 250g) was 1.41 euros. Today the package of 200g sells for €1.62. That is, the consumer is paying 21 euro cents more (or 15%) for a package containing 50g less product. As for the price per kilo, it has increased from €5.64 to €8.1, or 43.61%.

This phenomenon is the result of “shrinkflation,” which is also hitting Greece, and several industries have already proceeded with such plans. The above practice, at least as far as consumer information is concerned, cannot be considered misleading, since the correct weight is indicated on the package. According to market insiders, the change in packaging may also be a loophole so that these products are not subject to the profit margin cap provisions.

Margarine is not, of course, the only product affected. One top food company is now offering frozen vegetables in 900g packages, instead of 1kg. Also, some 450g packages were initially reduced to 400g and then increased to 420g. Its 450g pack of frozen peas until recently cost €1.95 or €4.33/kg and now costs costs €2.88 for 420g or €6.86/kg, i.e. a rise in the price per kilo by 58.42%.