The ACCC says greater transparency is needed to curb shrinkflation, which continues to be a major concern for Australian consumers.
Supermarkets could soon be forced to alert customers when a product is downsized but sold at the same price, or higher. The recommendation is part of The Australian Competition & Consumer Commission's inquiry into the sector, which says shrinkflation is a major concern of consumers.
Supermarket giants should have to alert customers when a product falls victim to shrinkflation, an inquiry into the sector has recommended. The Australian Competition and Consumer Commission found greater transparency is needed to curb the practice — where a product is downsized but sold at the same price and/or even higher. The ACCC noted they were unable to precisely pinpoint how much shrinkflation was occurring in Austrailan supermarkets. Despite this, the regulator said it was a major concern for the more than 21,4000 respondents to its consumer survey."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 — you're paying more to get less," one customer told the ACCC. "Shrinkage. Lots of products are getting smaller — smaller chocolates, less chips in a chip packet but the price remains the same," another said.The ACCC recommendation would see supermarkets be forced to notify consumers when a product's package size changes in an adverse manner.Be published near the pricing ticket and onlineIt also detailed safeguards to ensure supermarkets were not able to dodge the crack down by claiming changes to packaging meant the product was new. Coles had previously submitted to the ACCC that only a very small proportion of private label products were subject to shrinkflation. The supermarket giant, alongside Aldi, said it was "open to exploring" industry-wide measures to improve transparency. Woolworths, meanwhile, stated in public hearings there were fewer than 40 examples of shrinkflation out of about 6,000 private label products. It told the ACCC it instead supported product manufacturers alerting customers of changes to product size."While they may initiate the reduction in the product size, supermarkets are ultimately responsible for pricing and advertising of prices to consumers," the ACCC report found. "At most, suppliers could advise consumers of a product size or quantity change, but not whether or not there has been an increase or decrease in the price." In response to Thursday's report, Woolworths said it would "welcome recommendations that improve transparency for customers where they don't have unintended consequences or increase costs". Coles too welcomed recommendations that improve transparency while cautioning against "measures that will increase red tape and drive up costs"."Last year, Choice identified 15 supermarket products that had reduced in size, with the price remaining the same or increasing," senior campaigns and policy adviser Bea Sherwood said. "Consumers deserve more information when shrinkflation occurs, and the recommendation to introduce shrinkflation notices will help everyone make better-informed decisions while shopping." In December, Choice documented five examples including Coles' brand rocky road and salted caramel tarts which lost 60g and 30g in weight respectively, but saw the price increase by 50c. For the rocky road variety, that meant consumers were paying 42 per cent more per 100g than they did in 2023. At the time, Coles told Choice the price increase was due to rising production costs and high cocoa prices.The ACCC's recommendations are also in light of recent plans to introduce penalties to supermarkets that breach the Unit Pricing Code. The code requires grocery retailers to use unit pricing when selling packaged grocery items to help consumers identify the most cost-effective option.Ever noticed more air and less chips in a packet, even though it's being sold for the same price? The federal government says it has a plan to tackle "shrinkflation" by setting stricter rules around pricing. On Friday, Treasurer Jim Chalmers reiterated the plan, which includes improving comparability of prices between stores. "We're reforming the Unit Pricing Code which is all about that sneaky shrinkflation that drives people crazy," he told the ABC. During inquiry submissions, Aldi, Metcash and Woolworths had said changes in unit pricing was the main way they alerted customers to shrinkflation. The ACCC argued this method required customers to be aware of the previous prices of the item in question, and said any reform was "likely to have limited effect on transparency around shrinkflation". Ms Sherwood agreed that unit pricing regulation alone would "not address the problem of shrinkflation". "Shrinkflation notices will be a useful tool to improve transparency and we're pleased to see the ACCC has recommended this,"Photo shows A graphic of Woolworths and Coles signage and an up arrow with a receipt in backgroundMoviesRetail Industry
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