Two Democratic lawmakers are demanding that some of the biggest food and beverage companies stop engaging in “shrinkflation” — the practice of reducing…
In letters sent to General Mills, Coca-Cola and PepsiCo, the lawmakers asked the corporations to end their “pattern of profiteering.”Two Democratic lawmakers are demanding that some of the biggest food and beverage companies stop engaging in “shrinkflation” — the practice of reducing product sizes while charging prices that are the same or higher.
Coca-Cola has downsized its products, too, said the letter to Chairman and CEO James Quincey, and it is “selling less soda for the same price.” The same with PepsiCo, which “replaced its 32 oz Gatorade bottle with a 28 oz bottle for the same price.”“Shrinking the size of a product in order to gouge consumers on the price per ounce is not innovation, it is exploitation,” the letter to PepsiCo head Ramon Laguarta read.
in 2017 that promised a trickle-down effect but instead “incentivized price gouging” because “corporations raised prices to pad their profits, knowing that lower corporate tax cuts meant they would get more back on each dollar of price increase,” all three letters said., the letter to General Mills said that in the first five years following the 2017 tax cuts, General Mills paid an average effective tax rate of 14.
“Final price increases draw much bigger backlash than volume decreases,” she said. “So, between the two evils, the downsizing becomes a preferred option.” Sarah Gallo, senior vice president of federal affairs at Consumer Brands Association, a trade group that Coca-Cola, PepsiCo and General Mills all belong to, defended industry practices to NBC News.
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