Curbing 'Sneaky Price Hikes' from Shrinkflation... Hygiene Product Industry to Give Advance Notice of Capacity Changes

In an effort to curb so-called "shrinkflation," where product capacity is quietly reduced while prices remain the same-effectively raising real prices-the government and the hygiene product industry have agreed to establish a voluntary monitoring system. The goal is to ensure transparent disclosure whenever the capacity of essential daily necessities such as sanitary pads, diapers, and toilet paper is changed, so that consumers can be informed in advance.

Ju Byeonggi, Chairman of the Fair Trade Commission, attending the 'Agreement for the Provision of Important Information Such as Changes in Hygiene Product Volume.' Fair Trade Commission.

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On April 14, the Fair Trade Commission and the Korea Consumer Agency signed the "Agreement for Providing Important Information such as Changes in Hygiene Product Capacity" with 11 major domestic hygiene product manufacturers and distributors, including Yuhan-Kimberly and KleanNara, at the Korea Chamber of Commerce and Industry. This initiative follows a similar agreement with the food service industry (seven companies) in February, as part of efforts to prevent "hidden price increases" from spreading to the hygiene product sector.

The main purpose of the agreement is to require companies to provide advance and accurate notice to consumers whenever there is a reduction in the content, specifications, or number of units of daily necessities (i.e., unit specification reduction). Under the agreement, if a company intends to reduce the capacity by more than 5 percent, they must post this information for at least three months on the product packaging, their website, and at points of sale.

Additionally, companies are required to provide the Korea Consumer Agency with the product name and specific specifications before and after the change, and to announce this information on their own website for at least one month. Based on the information received, the Korea Consumer Agency will check for any unfair practices, such as unauthorized reductions without notification. If any violations are suspected, the agency will notify the Fair Trade Commission and post the information on the "True Price" website.

At the signing ceremony, Fair Trade Commission Chairman Joo Byung-ki emphasized, "When consumers later learn that a company has raised prices by quietly reducing product capacity, the sense of betrayal can be fatal to the company's image." He underscored that honest disclosure of information is essential for enhancing long-term corporate value, and called on companies to do their utmost to stabilize prices and ease the burden on consumers, even under challenging circumstances such as unstable raw material supplies.

The government plans to reward companies that faithfully comply with this agreement by providing incentives such as commendations and awarding additional points in the fair trade agreement compliance evaluation. On the other hand, it made clear its determination to respond strictly, in accordance with laws and principles, to any attempts to artificially distort prices through collusion or unfair business practices.

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