South Korea is set to take a firm stance against the deceptive practice of “shrinkflation” in the food industry. The country’s antitrust regulator, the Fair Trade Commission (FTC), has announced stringent measures to tackle this issue.
Henceforth, food manufacturers and suppliers will be mandated to inform consumers if they decrease the size of their products. Failure to comply could result in fines of up to 10 million won ($7,300).
The concept of shrinkflation, where companies reduce product sizes while maintaining the same price, has been identified as an unfair transaction by the FTC.
As a consequence, businesses engaged in this practice will be compelled to display labels notifying customers of any downsizing for a period of three months. This regulation, effective from August with a three-month grace period, aims to ensure transparency in pricing and product specifications.
FTC Imposes Strict Measures to Combat Deceptive Product Sizing and Pricing
The FTC emphasized the necessity of this change to prevent consumers from unknowingly shouldering substantial price increases due to reduced product quantities. This move comes in the wake of global concerns regarding dwindling purchasing power amidst rising inflation rates.
With surging food prices and living costs becoming pressing issues, governments worldwide are taking steps to alleviate the burden on households.
In South Korea, the issue of inflation was particularly salient in the recent parliamentary elections, where President Yoon Suk Yeol’s ruling party faced significant backlash.
To address these concerns, Yoon’s government has implemented various measures, including tariff reductions on food imports and urging companies to restrain price hikes.
The introduction of fines for shrinkflation represents a proactive approach by South Korea to protect consumers and promote fair business practices.
By enhancing transparency in product sizing and pricing, the government aims to mitigate the impact of inflation on household budgets and foster consumer confidence in the market.
