South Korea to fine manufacturers for not disclosing "shrinkflation
It is a common practice for manufacturers to reduce the weight of their goods to maintain the same price. South Korea has decided to combat this phenomenon. Manufacturers will have to inform about the reduction of the product or they will face a fine, reports the Reuters agency.
3 May 2024 17:09
Rising food prices and living costs are significant issues in South Korea. Instead of abruptly raising prices, manufacturers often opt to reduce the product's weight. The price remains the same, but the consumer buys a smaller item. The Government of Korea has decided to tackle this issue known as "downsizing" or "shrinkflation," reports Reuters.
The South Korean antitrust regulator announced on Friday that food manufacturers and suppliers will be required to notify buyers if they reduce the size of their products.
Otherwise, they will face a fine of up to 10 million won, which is about £6,400. For a first-time violation of the new regulations, the fine will be 5 million won, explains "Reuters".
The Fair Trade Commission (FTC) stated that manufacturers' actions are unfair and should be penalised. According to the new regulations, which will come into effect in August, manufacturers will have to place an appropriate label on their goods indicating the product reduction for three months.
The change was aimed at preventing situations in which companies reduce the size, standard, weight, or quantity of their products without sufficient notice so that consumers unknowingly bear a significant price increase, the FTC stated in a statement.
In carbonated drinks from the shelf large family packs of about 2.25 litres have almost completely disappeared, and 1.5 litres are becoming more popular. Similarly, the 1-litre bottle was replaced by about 850 millilitres. An interesting trend is observed in flavoured waters, where the leading producer replaced the 1.5 litres bottle with smaller ones of about 1.2 litres – pointed out in 2023 our interlocutor.
