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.”
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.
