Where to Find Shrinkflation Penalties

Last November, on the South Korea Consumer Agency website, you would have seen a bag of honey butter-flavored almonds,  a sliced cheese packet, and some sausage. While each had recently shrunk, their prices had not.

The post was a shrinkflation warning.

Shrinkflation Penalties

South Korea

A new South Korea rule mandates downsizing notices for most of their groceries. On the package, at the website, or in the store, a company has to tell consumers for three months that it shrunk the item without a price reduction. If they don’t, the fine is Won5m ($3,700) for the first offense and Won10m ($7,374.39) if it happens a second time.

France

Meanwhile, in France, some supermarkets (voluntarily) already were giving shoppers a shrinkflation alert:

On July 1st, rather than voluntary, the orange signs, like the ones in front the Doritos (above), will be mandatory. Retailers will need to keep them up for two months after the item shrunk. (I could not discover a fine.)

Brazil

But Brazil appears to have been first. At a government website dated 6/2022, I found a shrinkflation alert. With the 12-month inflation rate at a whopping 11.73 percent, Brazilian retailers were holding steady prices while diminishing package size. As a result, Brazil’s regulators said companies had to post an alert “conspicuously on labels for 180 days.”

Our Bottom Line: Behavioral Economics

Touching 2.9 percent, South Korea’s inflation rate has been coming down. Still though, with fresh food prices up 19.1 percent for the 12 months preceding March 2024, producers were downsizing.

A U.S. example, these Dove images display a Dove package that was 8.46 ounces and then 7.61.

Economists have hypothesized that consumers care more about rising prices than shrinking packages because they pay much more attention to price. Not only are we aware of its ups and downs but also we perceive the original price as an “anchor” that influences our response to the price increase. By contrast, quantity is less of an anchor.

As a result, for a slew of reasons that relate to economics and politics, governments have begun to require shrinkflation warnings.

My sources and more: For the South Korean approach to shrinkonomics, FT had the details. Somewhat different, the NY Times and Reuters described the French approach while Brazil was here. However, as always, our go-to shrinkflation website, mouseprint.org, had recent examples. They included Oreos (less cream in the cookie), Froot Loops (box weight down, from 10.1 ounces to 8.9 and then 7.9), and Ritz Bits (down, per bag, from 8.8 ounces to 7.5).