France Orders Retailers To Display Shrinkflation

By Reuters
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France Orders Retailers To Display Shrinkflation

French retailers will have to notify shoppers when products have been reduced in size without a corresponding cut in prices in an effort to tackle so-called shrinkflation, the country's finance ministry has said.

Shrinkflation has become a headache for consumers and governments alike as households have struggled to cope with dwindling purchasing power in the face of surging inflation in recent years.

From July, French retailers will have to display for two months when food and other common consumer goods products like detergent have been downsized in a way that causes the unit price to go up, the ministry said.

'Rebuild Consumers' Confidence'

"Shrinkflation is a rip-off, we're putting an end to it. I want to rebuild consumers' confidence and confidence goes hand in hand with transparency," finance minister Bruno Le Maire said in a statement.

Food prices became a major political issue in France last year after food inflation hit a record 16% following annual price negotiations between suppliers and retailers.


In reaction, the government passed a law to bring forward negotiations for this year and put pressure on companies to limit price hikes.

Supermarket chain Carrefour voluntary slapped price warnings on some products last September to put pressure on big consumer goods producers like Nestlé, PepsiCo and Unilever ahead of annual price negotiations.

Elsewhere, Hungary's government said in January that large food retailers will need to display price warnings on products that have shrunk in size from March onwards.

Hungary's inflation rate peaked at 25% in the first quarter of last year, the highest in the European Union, and it is struggling to revive the economy as consumers' purchasing power has declined.

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