The Austrian government said it will introduce measures to curb so-called “shrinkflation”.
The coalition administration has reportedly agreed on a law introducing extensive obligations for retailers following negotiations in the early hours of today.
Shrinkflation refers to the practice of manufacturers of consumer staples reducing the size or quantity of a product while keeping the price the same or raising it.
The customer pays more for a smaller quantity of the product, but may not realise it as much as an outright price increase.
Shrinkflation is an increasingly prevalent phenomenon in Austrian supermarkets, at least according to consumer protection organisations. The Chamber of Labour, the mandatory representation of all employed people in Austria, has called it “a secret rip-off”.
According to consumer protection agency VKI, shrinkflation is especially common for detergents, cosmetics and animal feed. In one example of many, a popular brand of cat food reduced the size of their bags from 6kg to 5.7kg while keeping the price the same.
In another internationally famous case Swiss chocolate manufacturer Toblerone changed the geometry of their chocolate bars to hide a cut in quantity.
The new Austrian law is planned to come into effect in the first quarter of 2026.
Retailers will be required to point out products affected by shrinkflation on their shelves. Supermarkets and other stores will have to display a change in price per kilo or litre for 60 days.
The State will carry out controls of the price displays. Violations of the law will carry fines of €2,500 per product and a maximum of €15,000 per inspection if the inspectors find fault with more than six products.
“Anyone who reduces the fill quantity must indicate this clearly, visibly and comprehensibly in future. Consumers should be able to see immediately what they are paying for, without any surprises later on”, said economics minister Wolfgang Hattmannsdorfer (Austrian People’s Party, ÖVP).
Experts, though, doubt the law will bring down prices. “I think this is a first step to signal that something is being done. But it will not have a major impact on the inflation rate,” economist Philipp Heimberger told newspaper Der Standard today.
Austrians are burdened by a tenaciously high inflation rate – currently topping 4 per cent per year and far above the target rate of 2 per cent set by the European Central Bank.
Economists blame the government for driving up prices, primarily by taking on new debt to pump more money into the economy but also by failing to bring down electricity and labour costs, which makes production more expensive.
