‘Shrinkflation’ OK, but not profiteering – DTI
MANILA, Philippines — “Shrinkflation,” or the process of manufacturers reducing the size and volume of their products to allow them to continue selling at current prices, is fine as long as it does not lead to profiteering, according to an official of the Department of Trade and Industry (DTI).
“Manufacturers are free to do that [shrinkflation]. It is ultimately their business decision to change their product as to the size and quality but the DTI will of course monitor it, especially in [the] case of basic necessities and prime commodities,” Assistant Trade Secretary Amanda Marie Nograles of the Consumer Protection Group said at the Bagong Pilipinas Ngayon public briefing on Wednesday.
“It will be a violation if there will be price manipulation [or] what we call profiteering. It means the price of an item is too much compared to the true worth, the real value of the product,” she added.
Under Republic Act No. 7581 or the Price Act of 1992, the government must protect consumers by stabilizing the prices of basic necessities and prime commodities.
Nograles said the DTI was looking at alternatives to help manufacturers avoid shrinkflation.
In the sardine industry, for example, it allows manufacturers to explore the possibility of having “Pinoy brand sardines,” with the cost within the DTI’s suggested retail price.
The “standardized” sardines, she added, could be offered in various brands with manufacturers in charge of coming up with strategies to market their respective products.
“This is one way for our manufacturers to at least preserve their businesses without resorting to shrinkflation. Because at the end of the day, it is in our favor to support businesses because they give us jobs,” Nograles said. The Philippine Amalgamated Supermarkets Association earlier said that manufacturers were resorting to shrinkflation to recover labor and production costs and still earn a profit. Some experts, however, warned that continuing shrinkflation could worsen food insecurity and lead to greater unemployment.
Support local farmers
The urban poor group Kalipunan ng Damayang Mahihirap (Kadamay), on the other hand, called on the government to start investing more in local food production next year to lower the prices of goods.
“There should be more support for our local farmers and the government must address everything they need for food production so that they could sell [their produce at] a lower price to every Filipino,” Kadamay Secretary General Eufemia Doringo told the Inquirer.
The group also criticized the privatization of some public markets and the looming Dec. 31 deadline for the consolidation of passenger vehicles under the government’s modernization program.
“This year, the urban poor have a lot of needs and wishes from the administration, from livelihoods of vendors, as well as that of jeepney drivers and operators, which may be at [risk] soon,” Doringo said.
She noted that 2023 was no better than previous years for the poor with the prices of commodities still rising.
“Workers earn a measly salary and the implemented wage hikes are not enough for a family’s everyday expenses. We also have electric and water bills that continue to go up with the poor suffering the most.”
