Shrinkflation is a phenomenon where products are reduced in size or quantity while maintaining the same price. The practice is often used by manufacturers to cope with rising production costs without directly increasing the retail price. Although it may seem like a subtle change, it has attracted considerable attention of consumer protections organisations around the world, leading to various regulatory responses. Manufacturers of consumer goods need to be aware of the legal implications and ensure compliance with emerging regulations to maintain consumer confidence and avoid potential legal challenges.

At present, the regulatory landscape varies widely from country to country. There are some countries that already have legislation in place to deal with shrinkflation. In France, for example, a proactive stance against shrinkflation has led to the introduction of legislation in July 2024. Retailers are now required to inform consumers if a product has been reduced in size without a corresponding reduction in price. Similarly, Hungary has introduced regulations effective from February 2024, requiring retailers to inform consumers when a pre-packaged product is replaced by a smaller unit. In Brazil, regulations to be implemented in 2024 will require manufacturers to declare volume or weight reductions on product labels for a period of six months. Other countries, including South Korea, are also tackling shrinkflation through various legislative measures. 

These examples highlight the need for all global companies to monitor current legislative developments very closely, as the content of the laws varies. It is particularly important to note that the laws also address different companies, sometimes the manufacturer, sometimes the retailer, and sometimes both.

Discussions on shrinkflation are ongoing in almost all other countries. In Austria, Italy, and the Netherlands, for example, parliamentary debates and consultations with consumer protection organisations are underway to determine the best approach to address the issue. In other countries, the discussions have already led to draft legislation that, but this has not yet been implemented, for example in Belgium, Portugal, Romania, and Spain. In these countries, it is therefore important to monitor if/when the laws are implemented, as implementation deadlines may be short. Until specific legislation is implemented, it will be necessary to assess whether shrinkflation products are permitted under existing laws, in particular unfair competition laws.

Several ongoing cases highlight the legal challenges associated with shrinkflation. In Europe, there have been notable cases where companies faced legal actions for not adequately disclosing changes in product sizes. These cases set important precedents and could influence future regulatory approaches globally. Companies should monitor these developments closely to understand the evolving legal standards and ensure that their practices are compliant. 

The European Union is closely monitoring the issue of shrinkflation. While there is no unified EU-wide regulation yet, the European Commission has expressed concern and is considering possible legislative action. A parliamentary question (E-000275/2024) was tabled on January 30, 2024, highlighting the urgent need for action at the European level to combat shrinkflation. The EU’s response is likely to shape the regulatory landscape in all member states, so it is essential that businesses are aware of potential changes and prepare for compliance.

The regulatory landscape on shrinkflation is evolving. Companies should keep abreast of legislative developments and be prepared to adapt their practices accordingly. Monitoring ongoing cases and regulatory changes will be crucial for businesses to ensure legal compliance. As more countries introduce regulations to combat this practice, companies must be vigilant and proactive in their response. By staying informed and transparent, companies can meet the challenges of shrinkflation and maintain consumer confidence.