Government to Respond to 'Shrinkflation'... Considering Strengthening Unit Price Labeling on Products

The government has begun considering measures to strengthen unit price labeling information on products in order to respond to so-called 'shrinkflation,' where product volume is reduced while maintaining the price. The plan aims to improve how changes in product volume are communicated so that consumers can more easily understand them, thereby resolving controversies over companies' so-called 'sly price increases.'

According to a comprehensive report by Asia Economy on the 16th, the Ministry of Economy and Finance and the Fair Trade Commission are discussing ways to enhance the unit price labeling system to provide consumers with more accurate product information. The unit price labeling system standardizes the display of product prices converted to a certain unit, allowing consumers to easily compare product prices per unit even if producers change the product volume or packaging method.

However, the current unit price labeling does not indicate how much the volume has changed compared to the previous amount, making it difficult for consumers to grasp these changes. Accordingly, there are reports that methods to strengthen labeling so that consumers can more easily and accurately check the changed product volume are being considered.

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho visited the Emart Yongsan branch in Seoul on the afternoon of the 14th to check prices of major items. Photo by Kang Jin-hyung aymsdream@

The shrinkflation behavior of food companies has rapidly increased recently as the government has pressured them to refrain from raising prices. For example, OB Beer reduced the volume per can in its Cass beer multipack from 375ml to 370ml in April, cutting 5ml, and Haitai Confectionery changed the volume of a bag of Gohyang Dumplings from 415g to 378g, reducing it by 37g. Although product volumes have decreased, cases where consumers are unaware and continue to purchase these products are increasing, leading to growing consumer dissatisfaction. On the 14th, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho warned, "If price, content, and weight labeling are inaccurate, strict sanctions must be imposed according to current regulations." A government official stated, "Once the enhancement plan for product labeling is finalized, specific details can be disclosed in the future."

Alongside this, the government is also considering lowering tariffs to reduce the production cost burden on food companies. Initially, it is looking into further tariff reductions by next year on major food raw materials such as corn for processing, soybeans, raw sugar/sugar, and food-grade potatoes. In particular, as the import price of potato starch, a raw material for ramen, has risen, the industry has reportedly requested an extension of the zero-percent tariff quota.

According to Statistics Korea, Korea's consumer price index rose 3.8% year-on-year last month, marking three consecutive months of increase since July (2.3%). During the same period, the U.S. consumer price index was 3.2%. This is the first time in six years and two months since August 2017 that Korea's inflation rate has surpassed that of the U.S.

This content was produced with the assistance of AI translation services.