Inflation hits consumers and corporations alike – but only companies can pass on the higher prices to their customers. They use audacious tricks. Here you can find out which stitches you should know about before your next visit to the supermarket.
Paying significantly more at the supermarket checkout and still having to shop more often – if you are currently sharing this experience, it is no coincidence. The highest inflation in decades is troubling consumers. And because corporations want to keep their margins, they resort to a number of tricks in order to pass on rising costs – as hidden as possible – to their customers. The result: Not only do many products often cost more, they also have less content.
This phenomenon, called “shrinkflation”, is not new. Consumer advocates therefore regularly choose particularly brazen hidden price increases as “cheating packages”. The most recent example is the “Leerdammer” brand cheese. Not only did the manufacturer reduce the filling quantity, but the supermarkets and discounters also gradually increased the price. Consumers have had to pay up to 43 percent more since the beginning of 2022.
Consumers quickly discover such tricks. And not every austerity measure burdens the consumer. In the USA, for example, manufacturers are increasingly forgoing glossy packaging and instead using recycled paper, reports “CNN”. Nothing changes in the content.
However, these examples are rare – and scams to pass the costs on to consumers are much more common. “The scam with smaller pack sizes is the best known, but there are different versions,” explains Armin Valet from the Hamburg Consumer Center, which awards the negative price of the “deceptive packs”. For example, it could be that the quantities sold are even larger, but the price increases disproportionately.
“Larger packs, which often only contain air, are also common,” says Valet. 30 percent air is still tolerated. But things can be even bolder: “In one case we had a can, around 10 centimeters high, containing 50 tiny tablets, but they barely covered the bottom of the can. However, because the number of pills matched the information on the packaging, our lawyers decided that we could not take action.”
“We demand that packs should always be full. Airspace should only be allowed in exceptional cases due to technical reasons,” says Valet. It also works perfectly with milk, flour or sugar. “Oversized packs that are only used for marketing are clearly a waste of resources.”
But there are other tricks that are discovered less frequently, warns Valet. These would affect the quality on which the manufacturers save. “In the case of crisps, for example, manufacturers are using palm fat again more often instead of sunflower oil. In some cases it is even legal, although sunflower oil is still advertised on the packaging. Here, the authorities accommodate the manufacturers if they can demonstrate that otherwise there would be significant disruptions or that production could not be maintained.”
The US broadcaster NPR called this tactic “skimpflation” – the manufacturer skimps on the quality or the services offered. There were particularly bizarre examples of this during the Second World War. Because price hikes weren’t allowed, the meat industry stuffed hot dogs with soy or potatoes, sold “steaks with extra bones,” and even offered horse or muskrat meat.
Such an approach is of course unthinkable nowadays, partly because certain product terms are protected by law. Still, “Skimpflation” hasn’t gone away. Current examples include shorter opening times for supermarkets or hotels that no longer clean their rooms every day. In the banking landscape, however, customers are feeling how the branch network is shrinking – and the walk to the nearest cash machine is becoming longer.
All of these qualitative changes have not always been to the detriment of consumers. For a long time, customers benefited from companies introducing additional services without turning the price. “In the 2000s and 2010s, we probably overstated inflation through unmeasured quality gains,” US economist Virginia Postrel said last year. The opposite is now the case: “Quality reductions are so ubiquitous that even the currently uncanny inflation rates are almost certainly still undervalued.”
And the tricks of the manufacturers still don’t stop there, adds Valet. Another tactic is special offers. “Recently there have been a lot of complaints about Rama because the pack size has shrunk from 500 to 400 milligrams after decades. It is therefore no coincidence that every supermarket and every discounter is now being flooded with Rama special offers.” This is intended to keep the customer happy and with the brand.
A major problem with shrink and skimpflation is that the consumer is hardly protected and would ultimately have to check for himself which manufacturers are secretly screwing up the price. “Of course, the consumer could also be meticulous about pack sizes. But why should the consumer check with each purchase whether the ingredients or the filling quantity have changed?” asks Valet.
Manufacturers would always quote the basic price, i.e. the price per kilogram or 100 grams. But that is not enough, says the consumer advocate: “The basic price is also suitable for comparing product A and B. But it doesn’t help when it comes to the same product where the old pack with more content is no longer on the shelf.”
“For me as a consumer advocate, it is unacceptable that all responsibility is placed on consumers. It cannot be the consumer’s responsibility to write everything down and constantly scan products. That’s just not the way to go,” says Valet.
But against the scams of the manufacturers, the consumer advice center can only take legal action with difficulty. “If the filling quantity is reduced and the calibration law is observed, there is nothing we can do. The pricing, in turn, is up to retailers, and the companies have freedom of contract.
Consumers should not rely on voluntary transparency by companies. “Even when companies such as Haribo announce that a pack is shrinking, that’s often a fig leaf. This is only noticeable in a direct comparison – but not to the consumer on the supermarket shelf,” says Valet. The consumer advocates are therefore demanding improvements from politicians, which have let customers down for too long.
There are also good role models, explains Valet: “Brazil is showing how things can be done better: If packs shrink there, manufacturers have to make this visible for at least six months – on the front of the pack, clearly legible, the old and new amount of content and the absolute and percentage change.”
