ACCC recommends transparency measures
The Australian Competition and Consumer Commission (ACCC) has recommended increased transparency measures to combat shrinkflation, a practice where products are downsized but sold at the same or even higher prices.
The ACCC's inquiry into the supermarket sector found that shrinkflation is a major concern for consumers, with many reporting instances of products becoming smaller while prices remain the same or increase.
To address this issue, the ACCC recommends that supermarkets be required to notify consumers when a product's package size changes in an adverse manner. This notification would include information about the previous and current unit prices, be published near the pricing ticket and online, and be displayed for a set period to allow consumers to become aware of the change.
The ACCC also recommends safeguards to prevent supermarkets from claiming changes to packaging are due to new products, thereby circumventing the notification requirement.
While some supermarkets have expressed openness to exploring industry-wide measures to improve transparency, the ACCC opposes proposals for product manufacturers to alert customers of changes to product size. The ACCC argues that supermarkets are ultimately responsible for pricing and advertising prices to consumers, and that manufacturers' notifications would not provide sufficient information about price changes.
Consumer groups have welcomed the ACCC's recommendations, stating that consumers deserve more information when shrinkflation occurs. They believe that the proposed shrinkflation notices will help consumers make better-informed decisions while shopping.
The ACCC's recommendations come amidst plans to introduce penalties for supermarkets that breach the Unit Pricing Code, which requires grocery retailers to use unit pricing to help consumers identify the most cost-effective option. The government is also considering reforms to improve the code and enhance price comparability between stores.
While some supermarkets have argued that changes in unit pricing are sufficient to alert customers to shrinkflation, the ACCC believes that this method is ineffective as it requires consumers to be aware of previous prices. The ACCC argues that additional transparency measures are necessary to address the problem of shrinkflation effectively.