Berlin, Düsseldorf Federal Consumer Protection Minister Steffi Lemke (Greens) is taking action against hidden price increases in retail. “Deceptive packages are a big nuisance. “Consumers are being misled here,” Lemke told Handelsblatt. “I would like to put a stop to that.”
According to the minister, it should be clearly regulated in the future “that packages of the same size with reduced contents are not permitted”. The same applies if the contents remain the same and the packaging is enlarged. “Such practices are problematic from both a consumer protection and waste avoidance perspective,” emphasized Lemke.
There should be corresponding requirements as part of the amendment to the Packaging Act. A bill is currently being voted on within the government’s internal departments. The SPD consumer politician Carstenträger called the proposed change in the law a “necessary step for environmental and consumer protection”. It is made clear “that less filling quantity is not permitted for the same packaging size”.
The reason is a problem that has recently become significantly worse – the so-called “shrinkflation”. The term combines the English word “to shrink” with “inflation”. Consumer advocates reported a new record for this form of hidden price increase at the end of August. Suppliers make products more expensive by selling less content in largely standard packaging. The price stays the same or increases.
The Hamburg consumer advice center and Stiftung Warentest gave several examples. The “Suchard Express” cocoa powder has shrunk from 500 to 400 grams and is therefore 25 percent more expensive. The “Duschdas Sport” shower gel has less content and at the same time the price increases – an increase of 22 percent.
Stiftung Warentest: “Most of the examples we show far exceed the inflation rate”
There was also a double price increase for the Hamburg consumer advice center’s current “sham pack of the month”, the mouthwash “Listerine” Total Care mouthguard from Johnson & Johnson: the pack size shrank from 600 to 500 milliliters. At the same time, the price rose from 4.45 euros to 4.95 euros. The customer actually pays over a third more.
Johnson & Johnson justified the approach by saying that, like many other manufacturers, they were confronted with cost increases, particularly in raw material and production costs. As part of a relaunch, the company switched to the industry standard pack size. The recommended retail price has been adjusted.
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Other manufacturers also justified themselves to Stiftung Warentest with increased energy costs. More environmentally friendly packaging could also be more expensive to produce, according to the study report. However, since supermarkets are reluctant to increase prices, manufacturers are forced to reduce quantities in order to offset their additional costs, said Armin Valet, an expert at the Hamburg Consumer Center.
“It’s not forbidden,” Valet continued. The filling quantity is stated on the packaging. “It is still a nasty trick designed to deceive consumers.” Ina Bockholt from Stiftung Warentest explained: “Most of the examples we show far exceed the inflation rate.”
There have always been deceptive packages. According to the Hamburg Consumer Center, the trend of hidden price increases has been increasing since inflation began in 2022: from the first to the second half of the year, confirmed cases almost doubled. In addition, the phenomenon is no longer predominantly seen in classic brands, but is now also more common in discount and organic brands.
When asked, the Food Trade Association (BVLH) did not comment specifically on the legal plans. A spokesman simply said: “Each manufacturer is responsible for their own products. This also applies to the pack size and the filling quantity.”
French supermarket chain warns of hidden price increases
“The tricks work because they are a benefit for both manufacturers and retailers,” said consumer advocate Valet. Retailers could maintain important price thresholds of around 1.99 euros so that consumers would not be scared off. “Hidden price increases via smaller quantities are widespread in order to maintain psychological price thresholds,” confirmed a well-known brand manufacturer who wished to remain anonymous. He therefore welcomes the planned law. “We are often annoyed by competitors who gain unfair competitive advantages with less content in the same size package. This has to end.”
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So far this year, consumer advocates have registered 75 products with hidden price increases – an increase of 50 percent compared to the previous year. “We therefore assume that our annual balance sheet for 2023 will contain significantly more hidden price increases than in the previous year 2022,” explained the Hamburg consumer advice center.
The SPD consumer politician Carrier praised the actions of the French supermarket chain Carrefour. From Monday, the company wants to warn of hidden price increases with stickers on a range of food products.
“Shrinkflation, the weight of this product has decreased and our supplier’s price has increased,” reads the stickers that Carrefour plans to place on packages of coffee, chips, mayonnaise and iced tea, among other things. The hidden price increases would be between eight and 40 percent. “We are committed to renegotiating the price,” the sticker continues.
The government in France is also taking action against deceptive packaging
Carrefour is thus anticipating a draft law with which the French government would like to oblige the industry to clearly indicate on products if the contents of the same package are reduced. “Some manufacturers reduce the contents of their products while keeping the packaging the same and sometimes even increase prices. “This is scandalous,” said Economy Minister Bruno Le Maire. “We will enshrine in law in October the obligation to visibly indicate the reduction in content when the packaging is the same.”
Carrier said, referring to Carrefour. “If German retailers follow this example, it would be a welcome step towards greater transparency for consumers.”
>> Read also: First inflation, then “shrinkflation” – How food manufacturers cheat on prices and packaging
The FDP consumer politician Katharina Willkomm, however, spoke out against Consumer Protection Minister Lemke’s plans. “In a free market economy, manufacturers are free to determine the price for their goods and the size of the packaging or to change both,” Willkomm told Handelsblatt. “There is no need for a legal ban on shrinkage.”
In addition, there is sufficient social control through negative prices such as the “deceptive package of the year”. “Consumers who feel fooled by the product should consistently change brands the next time they shop.”
More: Carrefour denounces Nestlé, Pepsi and Unilever for hidden price increases