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South Korea has introduced a crackdown on “shrinkflation”, saying producers of meals and day by day requirements should inform customers of any discount to their product sizes or face fines.
The Korea Truthful Commerce Fee mentioned on Friday it was designating the observe of slimming down merchandise whereas retaining their costs unchanged and never informing shoppers as an “unfair transaction”.
“This measure is to prevent a situation where reasonable consumers are forced to bear indirect price increases, as it is difficult to notice changes in product sizes or quantity if the prices and packages remain the same,” the KFTC mentioned in a press release.
The South Korean transfer comes amid worldwide anger on the observe of shrinking merchandise to cross on the price of inflation to shoppers.
US President Joe Biden in March criticised firms for downsizing merchandise, whereas French finance minister Bruno Le Maire has known as shrinkflation a “scam” and introduced that supermarkets must label merchandise the place volumes had been lowered.
Beneath the brand new South Korea rule, if producers of processed meals together with ham, cheese and noodles or family provides resembling rest room paper, toothpaste and detergents need to downsize merchandise, they have to put notices on packages or web sites or at shops for the three months following the change.
The brand new rule will take impact in August, with violators topic to a Won5m ($3,700) wonderful for a primary offence and Won10m for a second.
Excessive shopper costs have helped drive down the general public approval scores of South Korean President Yoon Suk Yeol, whose ruling celebration suffered a stinging defeat in parliamentary elections final month.
In March, Yoon ordered “extraordinary measures” to convey shopper costs underneath management, together with cuts to tariffs on meals imports and spending Won150bn to subsidise meals provides.
South Korea’s annual shopper worth inflation eased for the primary time in three months in April to 2.9 per cent from 3.1 per cent in March, however costs of recent meals have been up 19.1 per cent from the identical month of 2023.
As the federal government has discouraged firms from elevating costs to tame inflation, packages have shrunk.
In November, the federal government arrange a devoted price-investigation group for day by day worth checks on staple gadgets and in December listed examples of shrinkflation on the web site of the state Korea Client Company.
Among the many gadgets featured have been a bag of honey butter-flavoured almonds from HBAF lowered by 20 grammes, a sausage made by CJ CheilJedang whose weight was minimize by 12.5 per cent and a packet of sliced cheese from Seoul Dairy that was slimmed down 10 per cent.
Park Chong-hoon, head of analysis at Customary Chartered in Seoul, mentioned authorities wanted to convey inflation underneath management in an effort to minimize rates of interest to spur home consumption and enhance the economic system.
“I am not sure how effective the new rule can be in fighting inflation, but it shows how desperate the government is,” Park mentioned.
