Inflation: More and more manufacturers are secretly reducing the content

dMost consumers notice immediately how prices in supermarkets and discounters are rising. Thousands of products have skyrocketed in price in recent months, many more than once. But the amount on the shelf is not always the deciding factor.

With an increasing number of items, there are hidden price increases – due to a reduction in fill quantities and pack sizes. Customers simply get less content for the same price. Experts call this phenomenon “shrinkage”. The term is composed of the English word “shrink”, which means “shrink” and “inflation”.

A current example of shrinkage are the bags of chips from the Funny-Frisch brand. Manufacturer Intersnack has recently reduced the capacity from 175 to 150 grams. The large pack, on the other hand, now contains only 215 grams instead of 250 grams and the small packs weigh 40 grams instead of 50 grams. “These are hidden price increases of 16 to 25 percent,” calculates the Hamburg consumer consultancy and named Funny-Frisch as “deceitful package of the month” in November.

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Intersnack justifies the new grammages with huge cost increases. “Prices for raw materials including packaging and logistics have risen enormously,” the Cologne-based company said in a statement. In addition, energy costs would continue to rise, which would particularly affect Intersnack as a manufacturer of energy-intensive fried and baked products. “In order to continue to meet our high quality standards, we were forced to compensate for the increase in costs by adjusting the grammage.”

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This decision was not an easy one for the company. “We see these adjustments as a special step in challenging times.” However, Intersnack does not want to know anything about misleading packaging. “The reduction in fill quantity is reflected in the associated smaller packaging and the quantity labeling for our consumers.”

And not just at Funny-Frisch. According to the consumer advice center in Hamburg, Intersnack has also reduced the filling quantities of other brands, such as chips and tortillas from Chio or nut products from Ültje. “More than 30 snack products are likely to be affected,” the consumer advocates report, who have also identified a knock-on effect.

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“One provider starts, the other follows,” says Armin Valet, head of the Food and Nutrition department at the Hamburg Consumer Center. “We found at least 63 snack products from the four main suppliers with this trick.” Pringles from the manufacturer Kellogg Company, Lorenz Snack-World with the brands Crunchips and Nicnac’s and Pepsico with Lay’s and Doritos are also affected.

This shrink inflation has probably been preceded by tough negotiations with retailers. Because the tone is currently getting louder between dealers and manufacturers. Lionel Souque, for example, the head of the Rewe Group, which includes both the supermarket chain of the same name and the discounter Penny, openly accuses a number of brand manufacturers of inflating prices. “Most of the industry is well behaved and sensible,” reports the manager. “Then we will also accept price increases.”

After all, there are understandable cost increases for raw materials, packaging, energy, logistics and personnel. “But there are also a lot of freeriders who are riding the price wave and just want to improve their results,” Souque complains, meaning “mainly the large, international, listed consumer goods groups”.

High price demands and smaller packaging

Products from the American food giant Mars, which sells pasta dishes and animal feed in addition to chocolate bars, are currently missing from the shelves of both Rewe and Edeka. And there is also a public dispute with Coca-Cola, which has even led to the delisting of industry leader Edeka. Rewe, in turn, is also driving the chips problem.

Souque reported in September that Intersnack had charged high prices and also announced a reduction in the filling quantity of the French fries bags from 175 to 150 grams and complained publicly about this. The bottom line is that Intersnack demanded an increase of 22 cents per 100 grams due to cost increases. “But with our own brand we only get five cents.

So I wonder where the 17 cent difference comes from.” And he knows the background very well. “Because we have a large number of suppliers, are active in different countries and, thanks to our own brands, we also have a deep understanding of calculations, we understand what is and is not responsible.”

Intersnack justifies the new grammages with huge cost increases

Intersnack justifies the new grammages with huge cost increases

Source: Intersnack Deutschland SE/yellow images

However, from the consumer advocate Valet’s point of view, it’s not just the brand suppliers who stand out for shrink. For a long time, dealers pointed the finger at the industry when there were hidden price increases, says expert Valet. In the case of private labels, they themselves have been shrinking the content for a long time.

In any case, the consumer advice center in Hamburg reports an increasing number of complaints about private labels. “With a share of about 14 percent, there have been relatively few private labels in our list of misleading packaging in the past two years,” Valet reports. “But in the first half of this year it was already 25 percent.”

In the summer, for example, the consumer advice center put Jack’s Farm lamb steaks from Aldi Nord and Süd on the map, the packaging content of which has been reduced from 400 to 300 grams, and an organic wood-fired pizza with mozzarella, spinach and feta at the discounter Penny with 410 instead. of 460 grams with a price increase of 50 cents at the same time or the Olivano’s lentil bulgur salad Spicy from the Edeka subsidiary Netto Marken-Discount, the filling quantity of which was reduced from 250 to 200 grams with a simultaneous price increase from 89 to 99 cents.

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However, the cases of well-known brand products are more effective in terms of publicity. The Hamburg consumer advice center mentions Dove soap, Pril dishwashing liquid, Knorr sauces, Piasten chocolate lentils and the margarine Rama from Upfield, which only made the mock pack of the month in August. Despite the cup being the same size, the packaging no longer contains 500 grams, but 400 grams, which corresponds to a price increase of 25 percent.

At the same time, the filling quantities at Sanella, Becel and Lätta were also reduced. There is a simple logic behind this method: by changing package sizes, retailers and manufacturers want to ensure that certain price thresholds are not exceeded, which could ultimately prevent customers from purchasing certain products.

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