How the FTC and Congress plan to deal with shrinkflation

With inflation and rising living costs affecting more consumers, the issue of ‘shrinkflation’ is becoming a growing concern for shoppers. 

However, both the FTC and some members of Congress are now focusing on the problem and have said that they are now trying to make shrinkflation an illegal practice. If successful, new laws could give state attorneys and the government the right to start civil lawsuits against companies engaging in the practice. 

What is shrinkflation?

Shrinkflation is a subtle method for companies to increase or safeguard profits without overtly raising prices. However, companies have increasingly become covert in their implementation of this practice, aiming to make it less noticeable to consumers. 

This may involve repackaging items with reduced dimensions or altering formulations to incorporate cheaper ingredients while maintaining a similar appearance. 

Numerous well-known products have been subject to shrinkflation. Researchers at Deakin University’s Institute for Health Transformation discovered that seven Kellogg’s cereal boxes had shrunk since 2019, while 22 product packs remained unchanged.

Chocolate bars now come in thinner or shorter sizes, yoghurt is packaged in smaller containers, and even chips have seen reductions. In a subtle move, Tropicana introduced 52-ounce clear plastic jugs to replace their previous 59-ounce containers while maintaining the same price point. Cottonelle’s mega rolls have also decreased from 340 one-ply sheets to 312 sheets, while their soft version has been reduced from 284 two-ply sheets to 268.

How is Congress addressing the issue?

In Congress, U.S. Representatives Christopher Deluzio (D-Pa.) and Marie Gluesenkamp Pérez (D. Wash.) have recently introduced the Shrinkflation Prevention Act. 

 Sen. Elizabeth Warren (D-Mass.) recently said: “When companies are passing along increases in costs to themselves, I totally get it. But here’s the deal…over the past few years, their profits have gone up, their profit margins by 75%.  Now, that’s not just passing along increased costs. If that were the case, profit margins would have stayed the same. 

Instead, it’s using inflation kind of like a smokescreen. For example, that good old bag of Doritos, five chips are now missing. The Oreos, missing a couple of Oreos in there. The toilet paper is just a little shorter [of a] roll than it was before. And the consumer, paying the same, gets less.”

If approved, companies using shrinkflation to deceive consumers could face legal consequences. However, the proposals are still facing pushback from some members over fears of the consequences it could have on businesses.