Consumers in Latvia and around the world are increasingly facing shrinkflation (the reduction of the volume or weight of a product at the same price), which manufacturers use to lessen the psychological impact of rising prices, creating a deceptive illusion that the product costs the same as before.
Perhaps not everyone has been attentive enough to notice that chocolate bars have shrunk from the usual 100 g to 90 g, packages of butter from 200 g to 180 g, a bag of kefir often contains not one liter but only 900 ml, and rolls of toilet paper have become thinner.
At the same time, the price of many of the mentioned products has not changed or has even increased.
These are just a couple of examples of hidden inflation, or shrinkflation, but its scale is much broader.
In the past, the European Union had quite strict rules regarding standard packaging sizes for many products, but in 2009, a directive from the European Commission came into force that abolished standard sizes for a large part of packaged goods, allowing manufacturers more freedom in choosing the volume and weight of packaging. This effectively gave the green light to the process of shrinkflation.
"Manufacturers began to 'play' with packaging sizes, and the trend of reducing the weight or volume of products became widespread. For example, we open a large package of breakfast cereals, and inside there is a second package with cereals that is 20% smaller. Or a large box of chocolates that contains a smaller box with ten chocolates," says Henrik Danusevich, president of the Latvian Traders Association.
"Reducing packaging is not a new trend for Latvia; it has been observed before. It allows manufacturers to save costs and not raise product prices for consumers, which is especially important in the context of rising energy prices. It also enables a company to maintain its market position and demand for its products in a highly competitive environment.
However, competitors often follow this policy as well and reduce the packaging of their products, which can lead to a mass 'compression' of goods," says Sandra Ekabson, a professor at the Faculty of Economics and Social Sciences at the University of Latvia, noting that consumers do not always notice the reduction in the volume of goods, as reported by Latvijas Avīze.
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