The federal government is taking action to fight ‘shrinkflation’ in supermarkets by strengthening the Unit Pricing Code to make it easier for shoppers to make accurate and timely price comparisons.
The government will also introduce substantial penalties for supermarkets who breach the Code.
Prime Minister Anthony Albanese said the crack down will help Australians get a fair deal at the checkout.
“Tackling ‘shrinkflation’ through stronger unit pricing and new penalties is part of our plan to get a better deal for Australians,” he said.
“We are also making changes to make sure the ACCC is a tough cop on the beat, while also encouraging more competition and making sure there are significant consequences for supermarkets who do the wrong thing.”
Importance of unit pricing
Unit pricing helps consumers spot good value for money by being able to see the price of products by their volume, weight or per unit – so they aren’t tricked by unchanged packaging hiding less product.
The ACCC Interim Supermarket Inquiry Report, released by the Government last week, found that almost 90% of consumers always or often use unit pricing when deciding what products to buy.
Through the course of the Inquiry, stakeholders raised concerns about how supermarkets apply unit pricing in Australia – including the size and font of print on in-store labels and the inconsistent units of measure being used to price the same products.
Consumer group CHOICE has been calling for changes to the Unit Pricing Code for years to make unit pricing easier for consumers to use, including making it more visible and ensuring it’s used consistently.
“Unit pricing is one of the most effective ways for consumers to choose the best value products in the supermarket, with a 2022 national CHOICE survey showing that 74% of shoppers chose the best value product when the unit price was shown,” said CHOICE Deputy Director of Campaigns, Andy Kelly.
“Of shoppers that use unit pricing, 71% said they’d encountered problems under the current system – including unit pricing not being displayed, too small to read or obscured by another tag.”
Stealthy rise of shrinkflation
The practice of shrinkflation is becoming increasingly common, where the size of a product is reduced, but the price at the supermarket is the same or even increases.
In March, a CHOICE investigation uncovered 10 products affected by shrinkflation – with Coles and Woolworths store-brand cereals shrinking in size by 65g while the price stayed the same, resulting in consumers paying 14% more for the product.
“If consumers were clearly notified of these changes, it would be harder for supermarkets to continue to get away with this sneaky tactic,” Mr Kelly said.
“To make shrinkflation more transparent we really need labels on shelves alerting customers to when a product has shrunk, but the price has remained the same or increased.”
Strengthening the Unit Pricing Code
To make sure unit pricing is helping Australian shoppers, the government will be strengthening the Unit Pricing Code to ensure supermarkets are providing the information Australians need to find the best deal.
It will consult on improvements to the Code like:
- Improving readability and visibility of unit pricing in stores.
- Addressing inconsistent use of units of measure across supermarkets.
- Whether to expand the scope of retailers covered by the Code.
- More specific prominence and legibility requirements.
- Improving the use of unit pricing in cross-retailer price comparisons.
The government will also fund the ACCC to deliver a consumer awareness campaign showing shoppers how they can find the best deals.