According to the Office for National Statistics (ONS), “shrinkflation,” where manufacturers reduce the package size of goods while keeping the price the same is a response to “rising raw material costs.”
Shrinking food and drink pack sizes is not a new occurrence. Numerous examples highlighted within the last 5 years include Toblerone chocolate bars and Maltesers.
These, along with M&Ms and Minstrels, experienced size reductions of around 10% in November last year.
Falling sugar prices
The figures released by the ONS to help calculate the rate of inflation, raise concerns as to how chocolate makers are able to justify smaller same-priced portions in the face of commodity prices that show European import sugar prices have been falling since the middle of 2014.
In March 2017, it reached its lowest level since the International Monetary Fund records began in 1991.
Cocoa also reached a 5-year high in December 2015 because of droughts in the three biggest cocoa-exporting countries but has fallen sharply over the last year.
Further analysis of just how much shrinking pack sizes contribute to inflation found an addition of 1.22 percentage points to the rate of inflation of those items since the beginning of 2012.
However, this observation was only noted in the “sugar, jam, syrups, chocolate and confectionery” category.
In the “food and non-alcoholic beverage” category, shrinkflation had no noticeable effect possibly due to the relatively small number of shrinking pack sizes.
Confectionary decisions
Toblerone stated that “We are experiencing higher costs for numerous ingredients… we had to make a decision between changing the shape of the bar, and raising the price.”
Mars, who make Maltesers, M&Ms and Minstrels added that "Like all chocolate manufacturers, we have seen the cost of raw materials rise and, while we try to absorb these pressures as much as possible, sometimes we have to make the difficult decision to reduce the size of some of our products.”
The office also identifies recent falls in the value of the pound and the UK’s decision to leave the European Union as prime reasons for food manufacturers to practice shrinkflation.
However, the Office stated, “our analysis doesn’t show a noticeable change following the referendum that would point towards a Brexit effect.”
“Furthermore, others had been observing these shrinking pack sizes long before the EU referendum, and several manufacturers have denied that this is a major factor.”
Investigations by the consumer magazine ‘Which?’ found that in Tesco, family favourites such as McVitie’s dark chocolate digestives have shrank from 332 grams (g) per pack to 300 g.
These biscuits sold for €1.78 (£1.59) before they shrank and increased to €1.89 (£1.69) after. The price remained the same at €1.12 (£1.00) in Asda.
In addition, Tropicana s orange and raspberry juice remained at the price point of €2.77 (£2.48) despite a reduction from 1 litre to 850 millilitres (ml).