This file photo taken April 14, 2024, shows cookies and candies on display at a major discount chain store in Seoul. (Image courtesy of Yonhap)
SEOUL, May 3 (Korea Bizwire) — Companies will be fined for reducing packet contents while maintaining retail prices without notice in South Korea as the government seeks to eradicate “shrinkflation” practices to better ensure consumer rights, the antitrust regulator said Friday.
Under the envisioned revision of relevant regulations, manufacturers of daily necessities, including milk, coffee, instant noodles, toilet paper and shampoo, will be required to inform customers of downsizing their products without a price fall to match, according to the Fair Trade Commission (FTC).
Companies must put shrinkflation signs either on product packages, stores or their websites for three months starting on the day the quantity changes.
Those who defy the rule will face 5 million won (US$3,667) in fines for their first violation and 10 million won for the second violation, the FTC said, adding that the new rule will come into force starting August 3 given the time sellers need to be prepared.
The measure was in response to growing public complaints about shrinkflation practices where companies have shifted a rise in production costs to consumers amid high inflation.
Late last year, the government confirmed, after a monthlong investigation, that the quantity or size of 37 products of nine kinds had gotten smaller without a corresponding price decline, including cheese, beer and milk.
Under current law, shrinkflation practices are not illegal.
“We’ve decided to stipulate that corporate practices of downsizing products while maintaining prices without any notice constitute unfair transaction acts,” an FTC official said.
“The move is expected to help resolve asymmetric information issues between customers and manufacturers and create a better transaction culture,” he added.
(Yonhap)
