Context: Shrinkflation refers to the tampering of a product while maintaining retail price. In this article we are going to discuss in detail.

About Shrinkflation

• Shrink inflation is when a product downsizes its quantity while keeping the price the same. 

• Downsizing of products is done to offset higher production costs but keep retail prices the same.

• An increase in the cost of input materials and intense competition results in  Shrinkflation.

The effect of inflation

• Inflation has numerous effects on the daily life of consumers such as on rent, food, gas, and other living expenses.

• Since container and vessel sizes are reduced by extremely minor quantities, shrinkflation tricks consumers into thinking that the brands they purchase are unaffected by inflation.

• Shrinkflation can occur in different ways other than changes in quantity, by reformulating or removing ingredients while maintaining its price to keep consumers from switching to different brands.

• For example, Cadbury Dairy Milk stopped using foil which it used to prevent chocolate from losing its quality and flavour in order to save expense. Though downsizing products reduces costs for manufacturers, it is an unfair practice toward consumers. 

• Shrinkflation can lead to customer frustration and deterioration of consumer sentiment towards a producer’s brand. 

• Price points become misleading when the basket of goods cannot always be measured by considering the product size. 

• Overall inflation must be tackled to address shrinkflation. 

• It can be done with a mix of macroeconomic policies to manage demand and supply and address structural rigidities in the economy. 

• The Central Consumer Protection Authority shall bring guidelines to inform consumers about changes in quality, quantity, potency, purity, standard, and price of goods.

• In India, the Right to Information has been recognised as a consumer right under the Consumer Protection Act, 2019.