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Shrinkflation

Shrinkflation

  • Shrink inflation - when a product downsizes its quantity while keeping the price the same.
  • Eg, reducing the scoops of ice cream in a container or reducing the number of chips in a packet while keeping the price the same. .

Methods of shrinkflation

  • Reducing the weight
  • Reformulating or removing ingredients while maintaining its price.
  • Eg, Cadbury Dairy Milk stopped using foil which it used to prevent chocolate from losing its quality and flavour in order to save expense.

Impact on consumers

  • Deceives consumers into believing that the brands they buy are not affected by inflation.
  • The container sizes are reduced by very small amounts, saving manufacturers more money in the long run.
  • Can lead to a loss of trust if companies fail to properly communicate with them.
  • Can cause customer frustration and deterioration of consumer sentiment towards a producer’s brand.

Implications

  • Due to shrinkflation, it is more difficult to accurately measure price changes or inflation.
  • Price points become misleading when the basket of goods cannot always be measured by considering the product size.
  • Tackling shrinkflation means tackling inflation.

Conclusion

  • India needs a mix of macroeconomic policies to manage demand and supply, as well as address structural rigidities in the economy.
  • In India, the Right to Information is a consumer right.
  • The consumer has the right to know the quality, quantity, potency, purity, standard, and price of goods.
  • So, the Central Consumer Protection Authority needs to bring some guidelines to inform consumers when the weight of a product is reduced, instead of letting consumers be fooled by companies.

Prelims Takeaway

  • Central Consumer Protection Authority
  • Shrinkflation

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