Shrinkflation – quietly impacting the cost of living crisis

30th March 2022 / United Kingdom
Shrinkflation - quietly impacting the cost of living crisis

Cadbury has shrunk the size of its Dairy Milk sharing bars by about what they think inflation will reach by the end of the year – 10%. This is something that will silently happen across many product lines as manufacturers look to keep profits going in the war against increasing raw material and energy costs. It’s called shrinkflation.

American multinational confectionery, food, beverage and snack food company Mondelez, the parent company of the Cadbury brand, blamed costs associated with the production of its chocolate spiking, as it reduced the bars’ size from 200g to 180g.

They are still typically being sold at £2 despite the downsizing of their product. The company said the move was the first for that size of Dairy Milk bar in a decade. Whilst that might be true, in 2020, the company was accused of “shrinkflation” – reducing the size of a product while keeping the price the same – simply to boost profits.

At the time, Cadbury chocolate bars sold in multipacks, including popular treats like Crunchies, Twirls and Wispas, were “reduced in size to reduce their calorie count”, Mondelez said.

Shrinkflation is also good for the government. If an average-sized loaf of bread is reduced from 400 grams to 380 grams and the price stays the same – inflation calculations are such that a loaf of bread, not its weight is calculated. In saying that – a ‘typical’ loaf of bread is not the same as one litre of milk.

Currently, around 180,000 separate price quotations are collected every month in order to compile the RPI and CPI indices. They cover over 720 representative consumer goods and services. These prices are collected in around 140 locations across the UK. The ONS manages this monthly calculation.

Shrinkflation is not a product of your imagination and it does contribute to the overall household cost of living increases. Toilet rolls really did have more sheets of tissue, cereal boxes contained more and even the gaps between Toblerone’s chocolate peaks were smaller. In fact, Mondelez faced legal action in the US in 2017 over creating more space between the peaks of Toblerone chocolate bars.

Many of the products we shop for come from transnational corporations operating in countries all around the world – and they use the same shrinkflation tricks to a greater or lesser degree. For instance, in the USA, Cottonelle toilet paper, made by Kimberly-Clark, recently shrank mega rolls from 340 one-ply sheets to 312 sheets and Cottonelle’s soft version dropped from 284 two-ply sheets to 268 sheets.

It makes no difference how companies label it, shrinkflation is effectively a price increase and it does nothing but deceives consumers, who end up buying more to make up for the shortfall and an increased cost. It is needless to say that shrinkflation disproportionately affects consumers with lower disposable incomes.


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