A strange phenomenon is occurring Down Under. Grocery products are shrinking and yet prices continue to rise. But is this a helpful move to aid smaller families or simply back door profiteering? And why is no one being told? just-food.com’s David Robertson asks if there any justification for such an imbalance?

Consumers in Australia could be forgiven for worrying that they were getting greedy because they were eating and drinking more than in the past. But any relief in finding out that this is not due to greediness but shrinking portions has been outweighed by a sense of outrage that they are being ripped off.

A slew of “investigative” television and print journalism has highlighted a strange phenomenon: disguised by packaging and advertising, the size of many goods has shrunk.

Could it be magic?

According to the Australian press, a pack of Cadbury’s white chocolate has reduced in size from 250g to 240g. Golden Circle peas reduced from 440g to 420g. Fosters beer from 375ml to 345ml and many varieties of bread from 680g to 650g. Tinned vegetables, cleaning products, baby food, baked beans, biscuits, wine, soft drinks and potato chips have also all shrunk.

And before the supermarkets and food manufacturers had a chance to spin their way out of trouble, the Australian Bureau of Statistics offered its own research. In 1997, an average box of tea bags weighed 250g and cost A$2.11 (US$1.08) but by 1999 the price had risen to A$3.47 and the weight fallen to 180g. In 1995 meanwhile, the average roll of toilet paper contained 280 sheets but by 1997 the roll had shrunk to 270 sheets.

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Opening consumers’ eyes

Few people have noticed, however, and when they are told of the shrinkage their outrage is hardly surprising, particularly as food prices rocketed by more than 10% in the last year alone. Rising prices and shrinking volume is hardly a recipe for good customer relations but food manufacturers have been working hard to present their changes as positively (or discreetly) as possible.

New technology is enabling fancier containers for all types of foodstuffs and this has helped hide the changes. But not from Australian Competition and Consumer Commission (ACCC) chairman Allan Fels, who issued a stern warning to food manufacturers: “The question is about silence and disguising the moves by clever packaging.

“In principle it is covered by misleading and deceptive conduct, and the courts ask what is the impression in the minds of the ordinary person – not the marketing expert – but the person buying the product.

“So if they do get the wrong impression then it is misleading and deceptive. [Companies] should certainly start having a much closer look at the Trade Practices Act. Consumers can be very easily confused.”

Defending the decrease

But the food industry is beginning to fight back claiming that the changes are in response to demographics more than the cynical profit boosting exercise that consumer groups claim.

Lina Melero, public affairs director of the Australian Food and Grocery Council, told just-food.com: “Firstly, the point should be made that simply charting changes in a product’s weight/volume alone over a certain period of time is a one-dimensional comparison that fails to take into account other variables such as the use of improved ingredients or improved manufacturing processes.

“Further, from time to time, manufactures may change the size of their products in response to a range of external pressures. This includes consumer demand. The size of the average Australian family has decreased considerably during the past 20 years from 3.1 persons in the 1980s to 2.6 persons in 1999. By 2021 the average number of persons per household is expected to decrease to between 2.2 and 2.3 persons. Lone person households are projected to grow by between 1.7% and 3.1% per year between 1996 and 2021 to comprise between a quarter and a third of all household types (the fastest growing household sub-group).”

The food manufacturers also argue that other factors including international standardisation and safety require them to make changes. “Manufacturers may change the size of their product in order to ensure harmony with global markets,” adds Melero. “Obviously, having a consistent product size eliminates the cost associated with producing different size products for different markets.

“Incidences of tampering in the Australian market have also required manufacturers to spend more money on guaranteeing the safety of their products to Australian consumers. To absorb this increased packaging cost, product sizes may be decreased.”

Trick or treat?

But while the food industry can argue until it is blue in the face that shrinkage is justified, the massive scale of it in Australia, combined with considerable price rises, makes it hard for anybody other than paid believers to accept the explanations at face value.

Would these explanations placate a shopper who was shown the difference from last year to this year? Not a chance. And more worryingly for the industry, despite a warning from the competition watchdog, nothing is being done to break the news gently to consumers.

According to the Food and Grocery Council, supermarkets and producers are not educating people on the changes taking place. This could be seen as underhand and can only lend justification to the consumer lobby’s argument that this is backdoor profiteering. Unless the food industry wants to incur more bad publicity and the wrath of Allan Fels it should consider being more open about its changes.

By David Robertson, just-food.com correspondent

To view related research reports, please follow the links below:-

The Market for Packaged Food in Australia

Savoury Snacks in Australia (download)