Some Democratic lawmakers are demanding answers from corporations like General Mills, PepsiCo and Coca Cola. Lawmakers claimed the companies are exploiting customers with a phenomenon known as “shrinkflation,” which is the practice by big companies to reduce the size of a product but still charge the same price.
Sen. Elizabeth Warren, D-Mass., and Rep. Madeleine Dean, D-Penn., took aim at the food and beverage giants in a letter to the companies on Sunday, Oct. 6.
The letter asked three things of the companies:
- The food and beverage companies’ average price per ounce of soda or cereal since 2018.
- How much more in federal taxes they would have paid without the 2017 tax cuts.
- Whether company executives received bonuses or other perks as inflation rose.
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The letter accused the companies of engaging in shrinkflation to boost profits while benefiting from tax cuts under former President Donald Trump. The letter notes that General Mills reduced its cereal sizes like Cocoa Puffs family size from 19.3 oz to 18.1 oz, while hiking prices five times from mid-2021 to mid-2022.
The lawmakers also claimed PepsiCo “replaced its 32 oz Gatorade bottle with a 28 oz bottle for the same price.” PepsiCo denied it is making products smaller to exploit customers and notes the 28 oz Gatorade bottle has been around for more than a decade.
President Joe Biden also called out shrinkflation during his State of the Union Address this year, urging U.S. Congress to pass a bill cracking down on the practice.
“In fact, the snack companies think you won’t notice if they change the size of the bag and put a hell of a lot fewer, same size bag, put fewer chips in it,” Biden said. “No, I’m not joking, it’s called ‘shrinkflation.’ Pass Bobby Casey’s bill and stop this.”
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A trade group representing the three companies also previously defended offering reduced sizes while charging the same price, citing an inflation report showing markups on everyday items are in line with similar economic recoveries.
“The industry remains focused on providing the best products at the most competitive prices for customers,” a spokesperson for the trade group said.
[KARAH RUCKER]
MAYBE YOU’VE NOTICED SOME OF YOUR FAVORITE CEREALS OR SOFT DRINKS ARE GETTING SMALLER WHILE YOU CONTINUE TO PAY THE SAME PRICE.
IF YOU HAVE…MAYBE YOU’VE SEEN FEWER COCOA PUFFS OR GULPED DOWN LESS GATORADE THAN IN THE PAST… THOSE ARE JUST SOME OF THE MORE PROMINENT EXAMPLES…OF THIS PHENOMENON CALLED ‘SHRINKFLATION.”
THE PRACTICE BY BIG COMPANIES TO REDUCE THE SIZE OF A PRODUCT BUT STILL CHARGE THE SAME.
NOW, SOME DEMOCRATIC LAWMAKERS ARE DEMANDING ANSWERS FROM CORPORATIONS LIKE GENERAL MILLS, PEPSICO AND COCA COLA WHO THEY CLAIM ARE DOING IT TO “EXPLOIT” CUSTOMERS.
SENATOR ELIZABETH WARREN AND REPRESENTATIVE MADELEINE DEAN TAKING AIM AT THE FOOD AND BEVERAGE GIANTS IN AN OPEN LETTER SUNDAY.
THE LETTER FROM WARREN AND DEAN ASKS THREE THINGS OF THE COMPANIES.
THE FOOD AND BEVERAGE COMPANIES AVERAGE PRICE PER OUNCE OF SODA OR CEREAL SINCE 2018.
HOW MUCH MORE IN FEDERAL TAXES THEY WOULD HAVE PAID WITHOUT THE 2017 TAX CUTS.
AND WHETHER COMPANY EXECUTIVES RECEIVED BONUSES OR OTHER PERKS AS INFLATION ROSE.
THE LETTER ACCUSES THE BIG THREE OF ENGAGING IN SHRINKFLATION TO BOOST PROFITS WHILE BENEFITING FROM TAX CUTS UNDER PRESIDENT TRUMP.
THEY NOTE GENERAL MILLS REDUCED ITS CEREAL SIZES LIKE COCOA PUFFS, WHICH WENT FROM 19-POINT THREE OUNCES TO 18-POINT-ONE OUNCES, WHILE HIKING PRICES FIVE TIMES FROM MID-2021 TO MID-2022.
THE LAWMAKERS ALSO CLAIM PEPSICO “REPLACED IT’S 32 OUNCE GATORADE BOTTLE WITH A 28 OUNCE BOTTLE FOR THE SAME PRICE.”
ADDING, “SHRINKING THE SIZE OF A PRODUCT IN ORDER TO GOUGE CUSTOMERS ON THE PRICE PER OUNCE IS NOT INNOVATION, IT IS EXPLOITATION.”
PEPSICO DENIES IT’S MAKING PRODUCTS SMALLER TO EXPLOIT CUSTOMERS AND NOTES THE 28 OUNCE GATORADE BOTTLE HAS BEEN AROUND FOR MORE THAN A DECADE.
PRESIDENT BIDEN ALSO CALLED OUT SHRINKFLATION DURING HIS STATE OF THE UNION ADDRESS THIS YEAR– URGING CONGRESS TO PASS A BILL CRACKING DOWN ON THE PRACTICE.
[JOE BIDEN]
IN FACT, THE SNACK COMPANIES THINK YOU WON’T NOTICE IF THEY CHANGE THE SIZE OF THE BAG AND PUT A HELLUVA A LOT FEWER, SAME SIZE BAG, PUT FEWER CHIPS IN IT. NO, I’M NOT JOKING. IT’S CALLED SHRINKFLATION. PASS BOBBY CASEY’S BILL AND STOP THIS.”
[KARAH RUCKER]
A TRADE GROUP REPRESENTING THE THREE COMPANIES ALSO PREVIOUSLY DEFENDED OFFERING REDUCING SIZE WHILE CHARGING THE SAME PRICE.
CITING AN INFLATION REPORT SHOWING MARKUPS ON EVERYDAY ITEMS ARE IN LINE WITH SIMILAR ECONOMIC RECOVERIES.
A SPOKESPERSON FOR THE GROUP SAID, “THE INDUSTRY REMAINS FOCUSED ON PROVIDING THE BEST PRODUCTS AT THE MOST COMPETITIVE PRICES FOR CUSTOMERS.”
FOR MORE ON THIS STORY– DOWNLOAD THE STRAIGHT ARROW NEWS APP OR VISIT SAN DOT COM.
FOR STRAIGHT ARROW NEWS– I’M KARAH RUCKER.
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