Shrinkflation in Australia: The Hidden Cost Lurking in Your Weekly Shop

In the battle against inflation, one tactic is quietly reshaping how much we get for our money — without ever changing the price tag. It’s subtle. It’s strategic. And it’s happening on supermarket shelves across Australia.

This phenomenon is called shrinkflation, and it’s the inflation we don’t immediately see.

What Is Shrinkflation?

Shrinkflation occurs when a product is reduced in size or weight, but its price stays the same — or even increases. To the casual shopper, nothing appears to have changed. The box looks identical. The branding hasn’t shifted. But the product inside has been quietly reduced.

It’s a calculated move. Consumers are far more likely to notice a price hike than a slight reduction in volume. And in today’s economy, where manufacturing and transport costs have soared, many companies have opted to downsize rather than risk losing customers to sticker shock.

Everyday Examples You’ve Probably Missed

Some of Australia’s most popular brands have already made the switch:

• Kellogg’s Sultana Bran was once sold in 850g boxes. Now, it’s 700g — an 18% drop in quantity, with no change in packaging or price.

• Cadbury Chocolate Blocks, once 180g, are now 165g. The price, however, remains the same.

• Even seasonal favourites have been affected. In 2025, Cadbury’s Mini Eggs dropped from 408g to 374g, and the price rose by 20%. That’s a 31% increase in cost per 100g.

A Deakin University study found that between 2019 and 2024, Australian cereals shrank by an average of 54 grams, even as prices continued to rise. The packaging? Often unchanged — creating the illusion of value where there is less.

Why Is Shrinkflation Happening?

The short answer: cost pressures.

From packaging materials to fuel and freight, manufacturers are facing rising expenses. Instead of passing those costs directly to consumers, many are opting for shrinkflation — a move that preserves profit margins without overtly increasing prices.

It’s a psychological play. Consumers typically anchor value to price, not volume. By keeping the price constant, brands avoid triggering resistance — even if customers are receiving less for their money.

When Companies Go Too Far

In some cases, shrinkflation has crossed a line.

In 2015, McCormick & Company, one of the world’s largest spice producers, reduced the amount of black pepper in their tins by 25%. The tins looked the same, but the contents were not. A competitor, Watkins Inc., took legal action, claiming the packaging was deceptive. The case was eventually settled, but it brought international attention to the murky ethics of product downsizing.

How Other Countries Are Responding

Globally, regulators are beginning to push back:

• In France, as of July 2024, supermarkets are required by law to display a notice any time a product is reduced in size without a price cut — and that notice must stay up for two months.

• In the United States, the proposed Shrinkflation Prevention Act (2024) aims to classify such tactics as deceptive conduct, empowering the Federal Trade Commission (FTC) to hold companies accountable.

• In New York, a customer filed a lawsuit against fast-food chain Arby’s, alleging the company downsized its fry and drink portions without disclosure — effectively charging more for less.

Should Australia Follow Suit?

Here in Australia, shrinkflation isn’t illegal. Nor is it clearly disclosed.

But that may be changing.

In early 2025, the Australian Competition and Consumer Commission (ACCC) recommended that retailers be required to notify customers when a product has been reduced in size without a price drop. While no laws have yet been passed, the call for transparency is gaining momentum.

Consumer advocacy groups like CHOICE are also urging Australians to look beyond the price and examine unit pricing — a per-gram or per-litre figure now more important than ever.

The Real Cost of Shrinkflation

When we shop, we expect to receive fair value for what we pay. But shrinkflation chips away at that expectation — grams at a time. It’s not always easy to spot, and that’s precisely the point.

Over time, it erodes trust. And unless checked, it risks becoming the new normal in how we price — and perceive — everyday goods.

Final Thoughts

As cost-of-living pressures mount, transparency matters more than ever. Australians deserve to know when their dollar isn’t going as far as it once did — not just at the checkout, but inside the packaging too.

At IFS Mentor, we’re committed to helping Australians make smarter financial choices — by unpacking the numbers, exposing the trends, and shedding light on the real forces shaping our economy.

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