Shrinkflation: Cadbury’s Daily Milk bar getting smaller in Australia

Your chocolate bar is getting smaller but costing the same at the cash register.

The trend for a lot of food companies in recent years has been to reduce the size of the product but either keep the price the same or raise the cost to consumers. From price inflation to higher operating costs, corporations have embraced the shrinkflation aspect to help boost revenues and offset manufacturing costs.

One of the latest companies to implement this policy is Cadbury, which announced this week that its bestselling Dairy Milk bar in Australia would shrink by 10 percent to 200 grams from 220 grams. Of course, the price is remaining the same.

Parent company Mondelez International (MDLZ) confirmed in a statement that it is trying to combat rising manufacturing costs and the only other solution was to keep the bars the same size but sell them at a higher price.

This news hasn’t pleased many Australian consumers as they have inundated Cadbury’s social media accounts and lambasted their move. Australians shouldn’t feel alone, though, because Cadbury is doing the same thing in the United States and cutting its size by two squares.

Next they will reduce the caffeine in my coffee :-( “Cadbury shrinks Australian chocolate bars by 10%” http://t.co/BBUWqcIfRo

— Sheilagh O’Brien (@SheilaghIlona) February 3, 2015

So shrinking products is not the same as tax dodging but it’s certainly a form of ripping off consumers early on! http://t.co/q0N3j7vmmO

— Sylvia SG (@sylvia_sg) February 3, 2015

Other brands have adopted this business measure. For instance, we reported last month that Coca-Cola is selling smaller cans but keeping the price the same or even higher in certain parts. Here is the price comparison: a regular 12-ounce can of Coke on average sell for 31 cents, while a 7.5-ounce mini-can sells for 40 cents.

Economists warn that the shrinkflation trend is the first step toward soaring price hikes, otherwise known as skyrocketing price inflation. Others present the case that consumers would rather prefer a decrease in the quantity than paying higher prices. Either way, the consumer is in financial trouble at the grocery store.