Getting less for more: War on supermarkets shifts to shrinkflation scourge

The Albanese government’s war on the nation’s supermarkets will extend to the price labels on products from chocolate bars to blueberry muffins, promising to make it easier for shoppers to detect shrinkflation.

After revealing plans this week to target the release of undeveloped supermarket sites and inject $30 million into the competition watchdog to increase monitoring of the sector, Prime Minister Anthony Albanese will on Thursday announce new ways to help consumers know if a manufacturer has reduced the size of a product but maintained its price or increased it.

Anthony Albanese will announce new plans to target shrinkflation and its impact on shoppers.Credit: iStock

In an interim report into the sector last week, the Australian Competition and Consumer Commission (ACCC) found shrinkflation and the rules around unit pricing – identifying the cost of a good by a standard measurement such as per kilogram – were of growing concern for shoppers.

It heard complaints from consumers that shrinkflation was “happening with every product”, with packaging redesigned to hide a reduction in quantity.

The ACCC interim report found that unit pricing may have a limited effect when a manufacturer engaged in shrinkflation, noting that consumers who regularly purchased a good may not notice a smaller product.

The code covering unit pricing, introduced in 2008 (which is restricted to supermarkets more than 1000 square metres in size) can be inconsistent in measurements with some products not included.

Albanese said many consumers were angry on finding that a product that was once 500 grams had been reduced to 400 grams, but the price had not been reduced.

He said the government was trying to ensure shoppers got a fair deal at the nation’s checkouts.

“Tackling ‘shrinkflation’ through stronger unit pricing and new penalties is part of our plan to get a better deal for Australians,” he said.

“We are also making changes to make sure the ACCC is a tough cop on the beat, while also encouraging more competition and making sure there are significant consequences for supermarkets who do the wrong thing.”

Albanese said the government would strengthen the unit pricing code so that consumers received more information about their purchases.

He said price tags would be improved to make them more legible and more prominent, the units of measure would be overhauled to make them more consistent across supermarkets, and the current code could be extended to cover retailers outside of large supermarkets.

Retailers found breaching the unit pricing code will face “substantial penalties”.

The ACCC will also receive funding for a consumer advertising campaign to show shoppers how to find the best deals.

Albanese said shrinkflation was infuriating for consumers, adding he had brought up the issue with the CEOs of major supermarkets, which operate as a duopoly.

He said the CEOs were seeking to maximise their returns for shareholders.

“That means that there’s a tension between that and looking after their customers,” he told ABC radio.

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