Shrinkflation

In News 

• Companies employ ‘shrinkflation’ as  Inflation continues to impact the buying power of consumers

Shrinkflation

• About:
  • It refers to the tampering of a product while maintaining retail price
  • It is when a product downsizes its quantity while keeping the price the same.
    • For example, reducing the scoops of ice cream in a container or reducing the number of chips in a packet would count as shrinkflation.
• Cause: 
  • It occurs when materials or ingredients used to make products become more expensive and when there is intense competition in the market. 
  • As a result, instead of raising prices, they might just give you less of the product so as to maintain their profit margins. 
• Impacts:
  •  It deceives consumers into believing that the brands they buy are not affected by inflation, since container and vessel sizes are reduced by very small amounts, saving manufacturers more money in the long run. 
  • It can lead to customer frustration and deterioration of consumer sentiment towards a producer’s brand.  

•  Measures:
  •   We need 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 has been recognised as a consumer right under the Consumer Protection Act, 2019. This means that the consumer has the right to know the quality, quantity, potency, purity, standard, and price of goods. Therefore, 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.

Source:TH