France, Hungary, Romania and South Korea tackle shrinkflation

In response to rising production costs, including labour, raw materials, transport and packaging, many retailers and brands are reducing product sizes and packaging – a tactic known as ‘shrinkflation’. A way to help companies manage rising costs without significantly increasing prices for consumers, these reductions are often subtle and may go unnoticed. However, there is a growing call for greater transparency, with governments worldwide implementing regulations to ensure consumers are well-informed.

Shrinkflation regulations in place

Hungary: Starting March 2024 all shops with a turnover exceeding HUF 1 billion must indicate any reduction in packaging, size or volume. This information must be displayed near the shop entrance and next to the product.

France: Since July 2024, all consumer goods sold in constant quantities in large retailers must inform consumers about quantity reductions that lead to a price increase. The information must be displayed on the product or a nearby label for at least two months following ‘shrinkflation’.

Romania: From October 2024, traders must label reduced volume/weight products at the place of sale, displaying the price per reference unit and informing consumers of the changes.

South Korea: From January 2025, labelling provisions will inform consumers about products with reduced net content.

What is evolving in other markets

United States: The Shrinkflation Prevention Act 2024, aims to regulate shrinkflation as a deceptive act. If passed it would authorise the Federal Trade Commission (FTC) and state attorneys general to pursue civil actions against corporations engaging in shrinkflation.

United Kingdom: Currently, the UK lacks specific regulations on shrinkflation. A recent British parliamentary inquiry into fairness within the food supply chain brought to light concerns from MPs and consumer groups about the potential for shrinkflation to mislead consumers, with calls for clearer labelling and better communication from retailers. The UK will be a key market to watch in the months and years ahead.

Regulatory horizon scanning

Horizon scanning is an essential tool that will provide visibility into these evolving compliance requirements. By leveraging this strategic approach, your business will be able to proactively identify and mitigate risks, while capitalizing on emerging opportunities.

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For in-depth support on the changing labelling regulations please get in touch at [email protected]. Leatherhead’s experienced team of regulatory experts can support you every step of the way.