The food and drink industry is witnessing a rise in ‘shrinkflation’, a practice where products are reduced in size without a corresponding reduction in price. This trend is becoming more common due to escalating production costs. In order to enhance transparency for consumers, France has taken action by implementing new regulations.
Effective from 1 July 2024, French retailers must notify customers when shrinkflation has occurred. This initiative aims to inform consumers when they are paying the same price, or even more, for less product. The French Minister of the Economy, Finance, and Recovery, Bruno Le Maire, stated, “The practice of shrinkflation is a scam! We are putting an end to it to restore consumer confidence through transparency.”
According to the decree, French retailers must display information indicating when a product has been affected by shrinkflation. The display period for each product is two months. The required statement must include details about the changes in quantity and price to ensure consumers are informed about the true price evolution.
The products covered by this decree include packaged food and non-food items such as soft drinks, rice packets, and detergents. Both branded and private label products that decrease in quantity while maintaining or increasing prices fall under the new regulations. However, bulk food items and products that may vary during preparation, like deli items, are exempt.
Various well-known brands have been identified for shrinking their products without adjusting prices, including Lay’s, Doritos, Magnum, Carte D’Or, and Findus. The confectionery industry is also affected due to rising cocoa prices, which have led to challenges in production costs.
The new regulations have sparked debate, with some believing they go too far and others arguing they do not go far enough. The French food industry trade group ANIA has expressed concerns about the portrayal of shrinkflation as a scam. Conversely, consumer group UFC-Que Choisir questions whether the regulations will effectively bring transparency to consumers, suggesting that on-pack labeling would be more impactful.
Overall, the food and drink industry is facing challenges with shrinkflation, prompting the need for clearer communication and transparency to ensure consumer trust and satisfaction. By addressing these issues, the industry can continue to innovate and meet the changing demands of consumers in a competitive market.
