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In recent years, shrinking food portions have become a clear trend in the food industry.

To raise prices indirectly, food companies have resorted to every conceivable trick.

But is this legal?

1. Consumers Are Getting Less Food Have you noticed that everyday foods, compared to a few years ago, have the same price but the portion you get has quietly shrunk? For example, burgers are getting smaller:

Of course, this picture is a bit exaggerated.

Your feeling is correct. In recent years, shrinking food portions have become a clear trend in the food industry.

While keeping the packaging appearance, size, and price unchanged, the amount of food inside has decreased. In effect, this is a subtle way to raise prices—the same amount of food now costs more.

Consumers pay the same money but get less.

In 2017, loyal fans of the famous Swiss Toblerone chocolate were outraged—the gaps between the 'peaks' were widened, the dense cluster of 'mountains' disappeared, and the sparse 'hills' looked lonely.

Clearly, the manufacturer reduced the amount of chocolate, and consumers felt cheated.

However, Toblerone's partner company (Mondelez International) defended itself on Facebook, saying: "Making the 'peaks' smaller and sparser is to keep the product affordable for consumers."

In most countries, indicating the net weight on food packaging is a legal requirement, and a reduction in net weight can be directly shown on the package.

However, that number is often printed in tiny, thin, low-contrast letters to avoid drawing attention.

American consumer rights lawyer Edgar Dworsky gave an example: 20 years ago, a single-pack coffee was 450 grams, and it came with about 2 liters of ice cream and nearly 5 liters of milk. Now, the same-sized coffee has a net weight of only 370 grams, and the price has only gone up (and it may not include the ice cream and milk).

Closer to home, attentive consumers should have noticed that the net content of canned Coca-Cola sold in China has been reduced from the original 355 ml to 330 ml.

Shrinking Coca-Cola

Some other products may have even less actual content than the net weight stated on the package.

In 2017, the Ningbo quality inspection department randomly checked the net weight of snack foods and found that about 10% were short—the net weight did not meet the amount stated on the package.

2. Packaging Tricks The most common approach is to work on the packaging to try to 'get away with it.'

*Adding Useless Fillers Objectively speaking, for freshness and to prevent food from being crushed, adding fillers to food packaging is sometimes necessary.

However, after reducing the food portion, companies increase fillers to make the product look the same size as before.

Chips are one of the worst offenders for excessive fillers.

Because chips are fragile, manufacturers often fill the bag with protective gas.

But when the chips are reduced, the excess gas becomes unnecessary filler.

The ratio of chips to air in the bag

*Changing Packaging Mintel's "2017 Global Packaging Trends Survey" shows that with consumption upgrades and concept innovation, most consumers pay more attention to packaging form and design, and their purchase motivation is either directly related to packaging or to the product concept conveyed through packaging.

It can be said that modern food packaging has gone beyond practicality. It not only provides necessary information about the food itself (such as ingredients, shelf life, weight, etc.) but also relates to the communication of product concepts and the shaping of the company's image.

Food manufacturers obviously won't miss any opportunity to raise prices indirectly.

We found a very interesting phenomenon: as packaging becomes more updated, complex, and exquisite, food portions shrink proportionally.

We cannot simply jump to conclusions and say there is a direct link, but it is true that some companies use packaging changes as an opportunity to reduce net content.

Food companies' packaging tricks

3. Shocking Waste and Reduced R&D With shrinking food portions, over-packaging becomes more prominent.

Mooncakes are a major area of over-packaging.

According to an employee of a mooncake manufacturer, one of their mooncake boxes sells for 436 yuan, with packaging and ancillary items costing over 200 yuan, far higher than the actual production cost of the mooncakes themselves.

Over-packaged mooncakes

This kind of over-packaging not only squeezes investment in food materials but also causes shocking waste!

According to sanitation department statistics, of the nearly 3 million tons of garbage produced annually in Beijing, about 600,000 tons are reducible over-packaging.

If unnecessary packaging were reduced, Beijing could save at least 200 million yuan in waste disposal costs!

Moreover, the overall recycling rate of product packaging in China is less than 20%, far below the average of 50%-60% in developed countries, which causes great damage to the environment.

In a broad sense, product packaging also includes advertising.

Companies invest heavily in advertising and marketing, which helps increase brand awareness and exposure, but it also dilutes profits to some extent.

In the first half of 2016, the advertising expenses of the four major dairy companies—Yili, Mengniu, Guangming, and Sanyuan—all exceeded their net profits, with Guangming and Mengniu's advertising spending being 186% and 244% of their net profits, respectively.

Comparison of net profits and advertising expenses of four well-known dairy companies

Huge advertising investments increase production costs and shrink profits, and they also squeeze investment in R&D and raw materials.

A survey of Chinese food companies showed that in the first half of 2016, only two of the surveyed companies had R&D investment exceeding 100 million yuan; moreover, R&D investment accounted for only 2% of revenue, while advertising accounted for as much as 36.71%.

Some companies, to reduce costs, either lower net content or sacrifice product quality.

4. If You Can't Raise Prices Openly, Reduce Quantity Quietly Product pricing involves two important factors: reference price (price range) and floating price (upper and lower limits).

On one hand, consumers refer to past purchase experiences when buying a product, and these experiences set their expectations for the price of that product and similar ones.

Studies have shown that consumers' past experiences are an important yardstick for judging whether a price is reasonable.

Therefore, for merchants, pricing significantly above consumers' memory price is not a wise choice.

On the other hand, the floating range of prices sets upper and lower limits. Economists point out that for products with many similar substitutes and that consumers know well, especially food, the upper price limit is often low.

In other words, almost all products have substitutes for consumers to choose from. Any price increase by a merchant may cause consumers to abandon their product and choose a competitor's, leading to elimination in competition.

Facing the dual pressure of rising costs and improving efficiency, since they can't raise prices openly, they have to do it 'quietly'—reduce quantity.

In 2014, a study by an applied economist showed that consumers are about four times more sensitive to price than to product size.

That is, compared to price changes, quantity reductions are less likely to be noticed by consumers.

Moreover, consumers tend to judge product quantity by looking at the packaging or recalling past purchase experiences rather than checking the net weight on the label.

Some business management experts analyze that flashy packaging and increasingly diverse products bring in a lot of information unrelated to the food itself, seriously interfering with consumers' judgment, making it harder for them to see the truth behind this indirect price increase.

Additionally, changes in business philosophy are also a reason for food 'slimming.'

Some financial and investment companies, seeing the huge profits in the food industry, have joined in. These companies bring the 'profit above all' philosophy into the food industry, blindly pursuing smaller products and smaller portions to maximize profits.

Here's a question: Under the premise of ensuring quality, besides reducing quantity and directly raising prices, do companies have other options?

Yes.

In product development, using new technology or new raw materials is a possible way to reduce production costs. However, R&D usually means high upfront investment, which in the short term only increases production costs, and there is a risk of failure or changing the taste.

For companies, increasing R&D investment carries high risks: loss of capital and offending consumers. Therefore, for their own profitability and development, companies prefer to quietly 'slim down' their food.

Of course, some companies reduce quantity to keep prices stable for consumers' benefit, such as meeting the demand for small, portable packaging. Compared to large packages, small packages better preserve freshness and taste, and better suit fast-paced modern lifestyles and dieters.

Also, against the backdrop of general price increases, making food smaller does allow more people to afford it.

5. Is Food 'Shrinkflation' Legal? This situation has become common, but so far, no country has directly regulated the reduction of food portions.

Most countries' laws focus on related important issues, such as food packaging, with the basic principle of ensuring consumers have full information before deciding to buy a product, and minimizing waste and environmental harm from packaging.

The U.S. Fair Packaging and Labeling Act specifies labeling, standard setting, review reports, and handling procedures;

Japan's "New Packaging Guidelines" stipulate that packaging costs should not exceed 15% of the selling price, and the void space in packaging should not exceed 20% of the container volume;

Germany's "Ordinance on the Avoidance and Recovery of Packaging Waste" requires producers to ensure that waste packaging materials can be recycled.

Specifically, these regulations involve:

Requiring companies to provide detailed and complete descriptions of product contents on packaging;

Limiting excessive filling, over-packaging, and excessive advertising costs;

Recycling packaging materials and protecting the environment...

Currently, China has no formal legal provisions on packaging, but has established national standards based on international standards and practices, such as:

The recommended national standard "General Rules for Limiting Excessive Packaging of Commodities" (GB/T 31268-2014), in effect since 2015;

The mandatory national standard "Requirements for Limiting Excessive Packaging of Commodities—Food and Cosmetics" (GB 23350-2009), in effect since 2010.

The latter specifies the upper limits for packaging void rate and number of packaging layers for various foods, for example:

The void rate for beverages, alcohol, and pastries should be below 55%;

The number of packaging layers should not exceed 3;

The total cost of all packaging outside the product should not exceed 20% of the selling price.

Why don't countries directly restrict food 'shrinkflation'?

On one hand, as long as the net weight is clearly stated on the packaging, even if it has decreased, the act itself does not constitute deception and does not violate consumers' right to know.

On the other hand, reducing food portions falls within the scope of business strategy, and as long as it is within reasonable limits, the law does not need to intervene.

6. Do Companies Have a Responsibility to Tell Consumers About Reduced Portions? So, do companies have a responsibility to clearly remind consumers of changes in product quantity?

Admittedly, companies have indicated the product quantity on the packaging, but because there is too much distracting information on the packaging, and given the aforementioned packaging tricks, consumers find it hard to notice the truth of 'shrinkflation.' They still believe they are getting the same amount for the same price as before.

In other words, while companies' actions do not violate consumers' right to know the net content, they undermine consumers' right to know the necessary information for making a purchase decision.

Compared to consumers, companies have more and more complete information about their products. That is, for a given food product, there is serious information asymmetry between the company and consumers. In this situation, companies have a responsibility to maintain fairness and justice in the distribution of benefits and to protect consumers' interests.

However, in reality, companies often choose to use this advantage to make decisions in their own interest, and consumers may suffer losses without knowing it.

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