Nadia Mitsopoulos:
Well, we talk a lot on this program about shrinkflation. Now, you know what it is – you all experience it. That’s when the size or the quantity or the contents of a product suddenly reduces, but the price stays the same, and you are not told about it. And I know you notice this. I certainly do. I think I measured 16 Pringles. I weighed – when the size of a Pringles carton was reduced, I measured it and that was the equivalent to 16 Pringles. So, what have you noticed? And how do you feel about it? Because I know it annoys a lot of you. Get in touch on 1300 222 720 because it seems the government is finally going to try and do something about this. So, let’s get more from Dr Andrew Leigh, who is the Assistant Minister. Good morning and thank you for talking to me.
Andrew Leigh:
Good morning, Nadia, great to be with you.
Mitsopoulos:
You’re starting a consultation process today. What are you consulting the public on?
Leigh:
Well, we need to crack down on shrinkflation. As you said, sometimes it’s happening with confectionery, sometimes it’s happening with drinks – beers that used to be 375 ml now dropping down to 330 ml. I’ve even heard of stories of it happening with the size of toilet paper squares and the concentration of detergent. And so, we’re doing a consultation now about some big changes to the Unit Pricing Code which regulates shrinkflation. That will include extending its scope to more retailers, getting better price comparisons and putting some penalties behind the Unit Pricing Code.
Mitsopoulos:
So how does the code of conduct actually handle this at the moment or deal with it, or does it?
Leigh:
Well, it requires comparisons on unit pricing as the name suggests. But sometimes those comparisons aren’t as clear as they should be, and sometimes you’ve got the same supermarket line which is showing some products per 100 grams and other products per kilogram. You also have the problem that there can be a bit of a sneaky drop in size of a product while the price stays the same.
Mitsopoulos:
Sixteen Pringles, Assistant Minister. Sixteen Pringles.
Leigh:
Wars have been fought over less. So one of the things that we’re looking at is whether it’s appropriate then to have shoppers notified if there’s an instance of shrinkflation that’s adverse to them.
Mitsopoulos:
So how would that work? Are you talking about sort of naming and shaming these companies or actually having them say, you know, how would they tell a customer, ‘Sorry, but what was 500 grams is now actually 450 grams but you’re paying the same’?
Leigh:
Yes, the proposal the ACCC has looked at is having a notification on the shelf if suddenly the product shrinks in size and the price doesn’t shrink commensurately.
Mitsopoulos:
Andrew Leigh is my guest this morning, the Assistant Minister. If you have some examples, please send them through to 1300 222 720. Is this sneaky? Is this deceptive when companies do this?
Leigh:
Look, I think many people feel that way. They just want to get a reasonable deal for groceries at the checkout, and there’s a sense of frustration that if you’re buying a product from week to week you shouldn’t expect it to drop in size. The unit pricing approach is a good one, but we think it can now be beefed up, and that’s why we’ve got this consultation going. So, any of your listeners that want to have their say can go to Treasury.gov.au where the consultation will be open through to the 19th of September.
Mitsopoulos:
And so could the end result then be, as you sort of alluded to earlier, that if a company was to breach a new code and didn’t inform customers of, you know, an example of shrinkflation that they would be find?
Leigh:
Yeah, that’s one of the things we’re looking at. This is a Unit Pricing Code that applies to big supermarkets. They’ve got a lot of power and a significant market share in Australia. The market share of the big 2 here is as big as it is in any other country. So, we need to do more in order to hold them to account.
Mitsopoulos:
And so, this is when you talk about standardising units for comparison. So, we don’t have a – it’s not a standardised system at the moment?
Leigh:
We don’t tell them what units to use.
Mitsopoulos:
Right.
Leigh:
But sometimes when you’re comparing across, say chocolate, you’ll see different comparisons on the shelf and that can be a problem if you’re trying to make a clear comparison. Something is per 100 grams, something is per kilo, and now you’re finding yourself having to do maths in the grocery aisle.
Mitsopoulos:
So, if you have that standard where everybody has to use the same formula, that would make life a little easier for a consumer when they’re trying to find the best deal?
Leigh:
Yeah, that’s a goal. I mean, many of us will be staring at the supermarket shelves trying to work out how to get the best deal for the family. This really is about making sure that the information is up to scratch, that it’s comparable and looking at whether or not you want to have a requirement to tell shoppers if there’s been shrinkflation.
Mitsopoulos:
Are there? You know, things are expensive, things cost more to make these days. Do you think there is, you know, the companies that do reduce the size or quantity of their products, they’re warranted, that is warranted when they’re trying to manage costs?
Leigh:
Well, I think it’s pretty ubiquitous across the economy. I mentioned this in the car to a my 12‑year‑old this morning. He said, ‘Oh, Dad, I’ve seen the school canteen doing that.’ Now, no‑one’s going to penalise the school canteen for shrinkflation, but it just illustrates to you how common the problem is across the economy. Sellers feel the squeeze and they decide that it is easier to drop the size of the product than to increase the price. Now, we need more transparency, though, and our big supermarkets have the resources to do that and should be keeping shoppers up‑to‑date.
Mitsopoulos:
Because some may also look at this as price gouging.
Leigh:
Yes, exactly. And that’s something else we’re looking at. We’ll soon be announcing how we’ll go ahead and implement the government’s commitment to crack down on price gouging. We’ve done a lot else in this space – we’ve given additional resources to the competition watchdog, we’ve had the first‑in‑15‑years supermarkets inquiry, we’ve raised the penalties for anticompetitive conduct and we’ve updated the Food and Grocery Code of Conduct so that farmers get a better deal. So, a lot of what we’ve been doing in the competition space includes measures to hold the supermarkets to account.
Mitsopoulos:
All right, I’ll leave it there. Thanks for joining me. I appreciate your time.
Leigh:
Thanks, Nadia.
Mitsopoulos:
Dr Andrew Leigh there, the Assistant Minister. It seems a lot of you agree with him. Yes, the toilet paper squares do seem to be a little smaller.