And while the move may increase transparency, observers say its long-term effects are questionable.
In a statement announcing the crackdown, South Korea's market regulator, the Fair Trade Commission, said, “This measure is to prevent consumers from being unknowingly affected by indirect price increases.'' It belongs to.''
I'm really frustrated because I feel like I've been deceived.Park Shin Hye, Korean housewife
Manufacturers of daily necessities such as milk, coffee, instant noodles, toilet paper and shampoo will be required to warn customers if they change the size of their products, or face a fine of 5 million won (approximately 360,000 yen). Therefore, the penalty will be 10 million won, twice the previous amount. Second or subsequent violation. A notice must be posted on the product packaging, in-store, or on the manufacturer's website for at least three months after the change.
Growing public anger spurred a regulatory crackdown, and unsuspecting customers grew angry at having to shoulder the burden of higher production costs.
Park Shin-hye (36) said, “A bag of potato chips expands with air, so it looks like you're full, but when you open it, you find that the contents are much smaller than before.''
“It's really frustrating because I feel like I've been cheated.'' In America, even potato chip packs have air in them to protect the contents. But you can still find plenty of potato chips inside,'' said a student studying abroad in the United States. A housewife with a three-year-old son told This Week in Asia.
A month-long government study late last year found that 37 product categories, including cheese, beer and milk, were affected by shrinkflation.
Instant noodles sold at supermarkets in Seoul. Shrinkflation has been detected in many product categories in Korea.Photo: Shutterstock
“The corporate practice of downsizing products while maintaining the same price without warning consumers is unfair,” a Fair Trade Commission official said in a statement.
“This measure aims to correct the information imbalance between customers and manufacturers and promote a healthier trade culture.”
In a survey conducted last month by South Korean market research firm Enbrain, 83% of respondents said that shrinkflation has made shopping more expensive.
Women buy green onions at a market in Seoul. In South Korea, the price of fresh vegetables that are not imported has increased by more than 12% compared to the previous year.Photo: Reuters
Snack foods such as crisps and biscuits were identified as the most affected product, cited by almost three-quarters of people. This was followed by baked goods and rice cakes, cited by 46%. Ice cream and other frozen foods were down almost 39%. And chocolate is about 31%.
In the survey, more than 8 out of 10 people questioned said they were dissatisfied with product sizes being reduced without prior notice.
According to government statistics, prices for South Korean agricultural products were more than 20% higher last month than in the same month last year. Prices of fresh vegetables increased by an average of 12.9%, with outliers such as cabbage increasing by more than 32%.
Fruits rose 38.7%, led by pears, which more than doubled in price, and apples, which rose more than 80%. But imported fruit, by contrast, has seen its prices fall thanks to lower tariffs aimed at curbing inflation. Mango sales decreased by 24.6% from the previous year, and banana sales decreased by 9.2%.
In March, Yun ordered “extraordinary measures” to combat food inflation, including lowering import duties and injecting 150 billion won (US$108 million) in food subsidies.
Trade union members participating in a Labor Day rally in Seoul last week march with props depicting South Korean President Yun Seok-Yeol. Photo: AFP
“Political Stunt”
Lee Hong-ju, a consumer economics professor at Sookmyung Women's University in Seoul, said South Korea's shrinkflation crackdown could help consumers make “more informed purchasing decisions.” .
“However, it does not directly address the root causes of inflation, such as rising commodity prices, the complexity of global supply chains, and rising labor costs,” he said.
There are also concerns about how effective the policy will be, given the lack of compliance officers on the ground, Lee said.
“This measure will only be effective if pursued in conjunction with more comprehensive economic policies to tackle inflation,” he added.
This measure will only be effective if pursued in conjunction with more comprehensive economic policies to combat inflation.Lee Hong-joo, professor of economics
Choi Baek-keun, a professor of economics and commerce at Konkuk University, agreed that the main purpose of the measure was to quell public anger over the soaring cost of living, dismissing the crackdown as a “political stunt.”
Shrinkflation as a phenomenon is by no means limited to Korea.
US President Joe Biden in March called for shrinkflation as part of a broader strategy to reshape voters' views of the economy ahead of the November election, deflecting criticism of high prices and instead placing blame on big corporations. was pressed. France has also asked retailers to warn customers that: In the case of shrinkflation, last month it announced new rules requiring retailers to notify consumers if the price of a product remains the same or increases as it gets smaller.
French Finance Minister Bruno Le Maire called the act a “fraud” and stressed the importance of transparency.
There was no immediate reaction from Korean companies to the new shrinkflation regulations.
Additional reporting by Associated Press