Hike in Hidden Prices: Consumers face problems
Consumers should pay close attention to the size and contents of the packaging.
Photo: Robert Michael/dpa-Zentralbild/dpa
In order to conceal the price increase, manufacturers are reducing the packaging size of their products. Consumers should take a closer look. Consumer advocates fear: “The peak is yet to come.”
by Erich Riemann, DPA 08/19/2022, 06:07
Hamburger -. Anyone who will be reaching for well-known products in the food trade in the next few weeks should take a closer look than usual. Because it is quite possible that the contents of the well-known pack or pack have also shrunk, even if the price remains the same.
“We are currently experiencing the first wave of such hidden price increases,” said Armin Valet, food expert at the Hamburg Consumer Center of the German Press Agency. “But I think the high point is yet to come.”
For years, Valet has observed how manufacturers and retailers use pack sizes to mask price increases and crown a fraudulent pack of the year every 12 months. According to Valet, there are currently many complaints about such tricks at the Hamburg consumer advice center.
Reasons for Shrinkage Cure
The background is clear: food prices are currently rising dramatically. According to the Federal Statistical Office, groceries and non-alcoholic beverages were 14 percent more expensive in July than a year earlier. The increased raw material prices are just as noticeable here as high energy costs or additional expenses for logistics as a result of the corona pandemic and the Ukraine war.
The temptation for manufacturers and retailers to hide price increases is too great. If the pack shrinks a bit, it’s often less noticeable than if the price had gone up. There’s even a word for it: shrinkage and inflation.
“We will experience this more often than ever in the future,” says Martin Fassnacht, marketing specialist at the WHU Business School in Düsseldorf. “If such a threshold is exceeded, a product suddenly appears significantly more expensive and there is a risk that sales will fall drastically,” says Fassnacht, describing the problem.
demand for transparency
The expert certainly understands this practice. However, he believes manufacturers should play their cards openly to consumers. “In the interest of fairness, it’s important that when manufacturers reduce volume, they also reduce packaging.” Then they could certainly expect consumers to understand. “Some may be happy that they don’t have to pay more because of the volume reduction.”
There are currently plenty of examples of such “decay healing”. Haribo recently reduced its sleeping bag from 200 to 175 grams. The recommended price of 0.99 cents remained the same – despite 12.5 percent fewer ingredients. “As a company, since the beginning of the year we have been confronted with extraordinarily rising costs for high-quality materials, but foils, packaging materials, cardboard boxes and energy in the high double-digit range. And also for the logistics.” Haribo explained the steps. The company is adjusting the size and price of the packaging to stay affordable.
“It was important to us that we no longer have any “air” in the bag, i.e. keep the bag as big as it is, but also make the bag smaller,” emphasized a company spokesman. As a result, the reduction in the filling volume is clearly visible to the customer.
Branded goods manufacturer Henkel took a similar approach with its Vernell fabric softener. “Since we were not able to fully absorb the cost increase, we decided to partially adjust the filling volume of our products,” the company explained. The snack manufacturer Internac also had to “adjust the filling quantities of the Ultje Peanuts” due to increased costs. But consumer advocates have also been confronted with shrinking package ingredients for jam, margarine, crisps and even frozen pizza in recent weeks.
It’s not forbidden, the valet admits. But of course this is a trick at the expense of the customers. In his opinion, he is surprised that supermarkets and discounters are increasingly resorting to such hidden prices for their own brands. That used to be a rarity.
double price increase
According to the Hamburg Consumer Center, the association’s own list of misleading packaging has also increased the frequency of so-called double price increases. This means products in which not only the filling quantity has been reduced, but the price has also been increased by retailers. While this has affected an average of 18 percent of the articles submitted in the last two years, it was already around 35 percent in the first half of 2022.
Veterinarians from consumer protection organizations are not expecting an end to downsizing of everyday products for the time being. On the contrary: the peak is yet to come. He reckons it will take retailers about six months to replace labels and sell out older stock. “Thank you that there is much more to come.”
© dpa-infocom, dpa:220819-99-443264/2 (by Erich Riemann, DPA)