"Shrinkflation": A new obligation for distributors regarding the display of their products
Published on 29th Apr 2024
What is "Shrinkflation"?
Shrinkflation is a commercial practice which consists of reducing the size of a product while maintaining or even increasing its price.
With the increases in raw materials costs, many food suppliers have resorted to this practice to the detriment of consumers.
Several distributors have denounced this practice to consumers through shrinkflation campaigns, which in some cases have led to the distributor being found guilty of disparagement or, on the contrary, to the supplier's request for a conviction of the distributor being rejected.
To provide a framework for the content and format of the information provided to consumers, the French Ministry of the Economy and Finance adopted on April 16th a decree relating to consumer information on products price whose quantity has been reduced.
An obligation on distributors relating to the display their products
From July 1st, 2024, companies (i) operating in the sector of distribution of widely-consumed products as defined in Article L.441-4 of the French Commercial Code and (ii) operating, directly or indirectly, a store with a sales area of more than 400 square metres will have to inform consumers of the products concerned by "shrinkflation" by means of a specific display.
This information must be displayed directly on the packaging of the product concerned or on a label placed nearby and contain the following words in a legible and visible manner:
"For this product, the quantity sold has varied from X to Y and its price (specify the unit of measurement concerned) has increased by ....% or ..... € ".
The decree specifies that the obligation to display this information applies to all pre-packaged consumer products with a constant nominal quantity that have undergone a downward change in weight or volume. However, this new regulation does not apply to pre-packaged food products with variable quantities (e.g. pre-packaged “deli” products) or to non-pre-packaged food products sold in "bulk" format.
The information of the price increase for products which have been reduced in quantity must be displayed for a period of 2 months from the date the product with a reduced quantity is put on the market.
Failure to comply with this requirement is punishable, under Article L.112-1 of the French Consumer Code, by an administrative fine of up to €3,000 for an individual and €15,000 for a legal entity.
Shadow areas not covered by the Decree of 16 April 2024
The adoption of the decree reflects the government's intention to impose firstly on the distributor the obligation to inform consumers of changes in the constant nominal quantity of products that have undergone a downward change in weight or volume.
While it has the merit of providing a framework for the communication format that must be brought to the consumer's attention, the new regulation remains silent on certain practical aspects.
Indeed, one can wonder how the distributor will be informed of changes in the weight or volume of products. The information will first be available to the supplier of the products concerned, who will then have to set up precise and detailed monitoring of changes in product weight and volume. However, the supplier is not subject to this obligation.
Therefore in order to comply with this new display obligation, the distributor and the supplier will have to work together. But what happens if they don't?
The discussions surrounding “shrinkflation” don’t seem to be over, and suppliers themselves could soon be subject to new labelling obligations. But, in fact, they already are.
Stay tuned!
