The Australian government is taking significant steps to address consumer concerns over “shrinkflation,” where companies reduce product sizes while maintaining prices. This crackdown aims to enhance transparency in grocery pricing and protect consumers from misleading practices.
Beginning Monday, consultations will commence involving industry representatives and consumer advocacy groups. These discussions follow a comprehensive inquiry by the Australian Competition and Consumer Commission (ACCC) that highlighted Australia’s supermarkets as among the most profitable globally. The inquiry’s findings have prompted the government to consider stricter pricing regulations.
Andrew Leigh, Assistant Minister for Productivity and Competition, stated that shrinkflation has become widespread, leading to frustration among Australian shoppers. “Every time I speak to constituents about this, I’m flooded with examples of where people feel as though they’re getting ripped off by retailers,” he said. He pointed out common instances, such as reduced quantities in snack foods and even toilet paper, where retailers have decreased product sizes without altering the price.
The ACCC’s report, released in March 2023, made 20 recommendations aimed at improving supermarket competition and consumer experiences. One key suggestion was to require companies to inform customers when they reduce product sizes. Consumers reported that shrinkflation is pervasive across various products, often accompanied by packaging redesigns that obscure the reductions.
The Labor Party, which promised during its election campaign to fully implement these recommendations, is emphasizing the need for enhanced consumer rights. Potential reforms include more prominent display of unit pricing on supermarket shelves, allowing consumers to make better-informed choices. Leigh noted the current focus is primarily on major supermarkets, with discussions on potentially extending regulations to smaller retailers.
The government is also contemplating imposing court-enforced fines on companies that fail to comply with the new rules. Additionally, there is a proposal to standardize pricing units, as discrepancies in measurements can confuse shoppers. Leigh remarked, “No one wants to have to do maths when you’re turning up to just do the weekly shop.”
Consultations will last for three weeks and aim to gather feedback that will guide changes to existing pricing codes. Leigh emphasized the importance of empowering consumers with the necessary information to make informed purchasing decisions, particularly in the face of shrinkflation.
The ACCC’s inquiry was largely driven by public outcry regarding perceived price gouging amid a cost-of-living crisis. In response, the government has allocated $30 million to the regulator to enhance sector monitoring and address misleading practices by supermarkets. Funding for consumer advocacy group CHOICE has also been increased to provide shoppers with better information about supermarket pricing.
As the consultations unfold, it remains to be seen how these measures will transform the grocery shopping experience for Australians, providing clarity and fairness in product pricing.
