The issue of shrinkflation is causing increasing concern among Australian consumers, with product sizes shrinking while prices stay the same or rise.
The Australian Competition and Consumer Commission (ACCC) has proposed measures to improve transparency, urging supermarkets to notify customers when these changes occur.
According to a report by ABC News, the recommendations call for clearer communication about product downsizing, enabling shoppers to make more informed purchasing decisions. The push highlights the need for greater accountability in retail pricing.
A Need for Transparency
According to the ACCC, greater transparency is required to curb shrinkflation, a practice that has sparked concern among Australian consumers. A survey of over 21,400 respondents revealed widespread awareness of the issue, with many consumers noticing that product packaging had changed to appear the same while actually containing less.
One respondent described it as “clever deception,” citing smaller chocolates and chips sold at the same or higher price.
The ACCC’s recommendation calls for supermarkets to clearly inform consumers about changes in package sizes, including previous and current unit prices. This information would be displayed on product labels in-store and online, ensuring customers are aware of these changes. Consumers have been vocal about their frustrations, with one saying,
Shrinkflation is happening with every product. The packaging is being redesigned to look the same but if you look closer it’s actually smaller — so you get less — [but] you’re paying more to get less.
Another remarked,
Shrinkage. Lots of products are getting smaller — smaller chocolates, less chips in a chip packet but the price remains the same.
Supermarket Reactions
While Coles and Aldi expressed willingness to explore industry-wide transparency measures, they raised concerns about potential cost implications. Coles submitted that only a very small proportion of private label products were affected by shrinkflation.
Similarly, Aldi stated it was open to exploring measures to improve transparency but was cautious about potential impacts on costs and operational processes.
On the other hand, Woolworths advocated for manufacturers to notify consumers about size changes, suggesting that it should be the responsibility of the suppliers.
However, the ACCC opposed this suggestion, arguing that supermarkets are ultimately responsible for how these changes are communicated. The ACCC emphasized that
“while they may initiate the reduction in the product size, supermarkets are ultimately responsible for pricing and advertising of prices to consumers.”
Woolworths has stated it would
welcome recommendations that improve transparency for customers where they don’t have unintended consequences or increase costs.
Similarly, Coles welcomed recommendations to improve transparency but cautioned against measures that could lead to increased red tape and costs.
Consumer Advocacy Support
Consumer group Choice welcomed the ACCC’s recommendations, highlighting that shrinkflation has been a persistent issue for many consumers. Last year, Choice identified products like Coles’ rocky road and salted caramel tarts, which shrank in size while their prices increased.
For example, the Rocky Road saw a 60g reduction in weight but an increase in price of 50c, leading to a 42% higher price per 100g compared to 2023. Choice believes that introducing shrinkflation notices will help consumers make more informed purchasing decisions.
Shrinkflation notices will be a useful tool to improve transparency and we’re pleased to see the ACCC has recommended this,
said Bea Sherwood, senior campaigns and policy adviser at Choice.
Reforms to the Unit Pricing Code
The ACCC’s report aligns with ongoing efforts to enhance the Unit Pricing Code, a regulation designed to help consumers compare prices across stores. The Albanese government has indicated that it will consult on potential reforms to improve the comparability of prices, particularly concerning shrinkflation.
Jim Chalmers, the Australian Treasurer, reiterated the government’s plans, stating,
We’re reforming the Unit Pricing Code which is all about that sneaky shrinkflation that drives people crazy – in an interview with the ABC.
However, the ACCC argued that relying solely on unit pricing to address shrinkflation would
likely have limited effect on transparency around shrinkflation.
Consumer experts agree that while unit pricing is useful, it doesn’t fully tackle the problem. As Sherwood pointed out, unit pricing alone will “not address the problem of shrinkflation.”
The introduction of shrinkflation notices is seen as an important step toward improving transparency and helping consumers make better-informed choices.
