France to Require Stores to Warn Customers of Shrinkflation by July 1

The French government has announced a new rule that will require stores to inform customers when a product becomes smaller but its price stays the same or increases, a practice known as 'shrinkflation'. Finance Minister Bruno Le Maire called shrinkflation a "scam" and stressed the importance of transparency, stating that "consumers must understand the real price evolution of products when their sizes change".

Starting July 1, 2024, retailers at medium to large supermarkets in France will have to display specific information about the price per unit and any changes in quantity next to affected products. This requirement applies to a wide range of goods, including food and household items. The information must be visible for two months following any changes in product size or quantity.

Why this matters: Shrinkflation has become a major issue for consumers and governments as households struggle with dwindling purchasing power due to high inflation. The French government's move aims to restore consumer confidence and combat what it sees as a deceptive practice by manufacturers.

Consumers are encouraged to report any pricing discrepancies through France's SignalConso website or app. Consumer watchdogs have welcomed the new rule, saying it is a French way to address the problem and not let markets rule on the issue. However, some retailers have expressed concerns about the burden of implementation, suggesting that manufacturers should be required to report on shrinkflation instead.

The new legislation follows a recent pricing dispute between PepsiCo and European retail major Carrefour, which led to the supermarket removing PepsiCo products from its shelves across Europe. It is part of the French government's broader efforts to tackle food price inflation, which hit a record 16% in 2022, prompting new laws to pressure companies to limit price hikes.

Key Takeaways

• France to require retailers to disclose 'shrinkflation' - reduced product sizes with same/higher prices.
• New rule applies to medium to large supermarkets, effective July 1, 2024, for 2 months after changes.
• Consumers can report pricing discrepancies through France's SignalConso website or app.
• Measure aims to restore consumer confidence and combat deceptive practices by manufacturers.
• Follows pricing dispute between PepsiCo and Carrefour, part of France's efforts to limit food price inflation.