New Law Against "Shrinkflation" Brings Hefty Penalties for Deceptive Packaging

Hidden price increases in the food trade are to be made more difficult and more severely punished. The federal government has agreed on a corresponding law to combat the so-called "shrinkflation," as it announced on Tuesday after the cabinet meeting. Accordingly, food retailers must indicate the reduction of package contents at the same price for 60 days. Violations are subject to fines of up to 15,000 euros.

Retailers Must Comply with New Labeling Requirement

The labeling requirement for a reduction in package contents applies to companies in the food and drugstore retail sectors. The labeling must be attached to the product, on the shelf, or in the immediate vicinity, as explained by Minister of Economic Affairs Wolfgang Hattmannsdorfer (ÖVP) at the press foyer. Exempt are small independent retailers who operate five branches or fewer. They can comply with the labeling requirement by posting a notice, and for their branches under 400 square meters, the obligation is waived.

Fines of Up to 15,000 Euros for Non-Compliance

Hattmannsdorfer spoke of an "anti-deceptive packaging law." For violations, there will be a consultation the first time, fines of 2,500 euros per product offense capped at 10,000 euros for the second violation, and the maximum total fine increases to 15,000 euros for the third time. The corresponding government proposal is to be approved by circular resolution today or Wednesday and introduced in the National Council this week so that the law can be passed this year.

In addition, another law for greater base price labeling is intended to make prices more comparable for consumers. According to this, the base price must be at least half the size of the sales price. This is intended to put an end to "discount deceptions" by food corporations, said Vice Chancellor Andreas Babler (SPÖ).

Criticism from Retail, Praise from Foodwatch

The food retail committee in the WKÖ clearly rejects the draft law, as stated in a press release. For retailers, the labeling requirement means "once again additional effort - and this, even though they are not the cause of 'shrinkflation'." From the perspective of Chairman Christian Prauchner, a labeling requirement should be implemented at the European level with producers. The "national special path" will lead to additional effort, which will also be reflected in shelf prices.

The trade association, an interest group for trading companies, strikes the same chord. The new labeling requirement is "not cause-appropriate, increases costs and burdens 140,000 employees in the food retail sector," says trade association managing director Rainer Will. The law will "not reduce prices on the shelves, but lead to more bureaucracy, more personnel effort, and thus higher costs. Retailers are just as annoyed by 'shrinkflation' as consumers, but they can't do anything about it. Will also calls for an EU-wide labeling requirement for manufacturers, which would be 'cause-appropriate and fair.'

In contrast, the consumer protection organization foodwatch welcomes the legislative proposal. It recalls that a joint analysis with the price comparison platform preisrunter.at showed that "almost all product categories of food are now affected - from snacks to canned vegetables to ice cream."

(APA/Red)

This article has been automatically translated, read the original article here.