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South Korea has introduced a crackdown on “shrinkflation”, saying producers of meals and each day requirements should inform consumers of any discount to their product sizes or face fines.
The Korea Honest Commerce Fee mentioned on Friday it was designating the follow of slimming down merchandise whereas holding their costs unchanged and never informing customers as an “unfair transaction”.
“This measure is to stop a state of affairs the place affordable customers are compelled to bear oblique worth will increase, as it’s tough to note adjustments in product sizes or amount if the costs and packages stay the identical,” the KFTC mentioned in a press release.
The South Korean transfer comes amid worldwide anger on the follow of shrinking merchandise to move on the price of inflation to customers.
US President Joe Biden in March criticised corporations for downsizing merchandise, whereas French finance minister Bruno Le Maire has referred to as shrinkflation a “rip-off” and introduced that supermarkets must label merchandise the place volumes had been decreased.
Underneath the brand new South Korea rule, if producers of processed meals together with ham, cheese and noodles or family provides comparable to rest room paper, toothpaste and detergents wish to downsize merchandise, they have to put notices on packages or web sites or at shops for the three months following the change.
The brand new rule will take impact in August, with violators topic to a Won5m ($3,700) tremendous for a primary offence and Won10m for a second.
Excessive shopper costs have helped drive down the general public approval rankings of South Korean President Yoon Suk Yeol, whose ruling celebration suffered a stinging defeat in parliamentary elections final month.
In March, Yoon ordered “extraordinary measures” to convey shopper costs underneath management, together with cuts to tariffs on meals imports and spending Won150bn to subsidise meals provides.
South Korea’s annual shopper worth inflation eased for the primary time in three months in April to 2.9 per cent from 3.1 per cent in March, however costs of recent meals have been up 19.1 per cent from the identical month of 2023.
As the federal government has discouraged corporations from elevating costs to tame inflation, packages have shrunk.
In November, the federal government arrange a devoted price-investigation staff for each day worth checks on staple objects and in December listed examples of shrinkflation on the web site of the state Korea Shopper Company.
Among the many objects featured have been a bag of honey butter-flavoured almonds from HBAF decreased by 20 grammes, a sausage made by CJ CheilJedang whose weight was reduce by 12.5 per cent and a packet of sliced cheese from Seoul Dairy that was slimmed down 10 per cent.
Park Chong-hoon, head of analysis at Customary Chartered in Seoul, mentioned authorities wanted to convey inflation underneath management as a way to reduce rates of interest to spur home consumption and increase the economic system.
“I’m not positive how efficient the brand new rule might be in combating inflation, nevertheless it reveals how determined the federal government is,” Park mentioned.