Shrinkflation: What is it? What is causing it? Why is Cadbury slashing size of its Dairy Milk chocolate sharing bar but keeping the price the same? What other products have been affected?

CADBURY has continued the trend of reducing the size of its products but maintaining the price.
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The company said it has been forced to make the Dairy Milk sharing bar 10 per cent smaller, because the cost of production has risen sharply.

It is still on sale at the same price.

Cadbury’s parent company, Mondelez, said it is the first example of ‘shrinkflation’ at the brand for a decade.

A Cadbury Dairy Milk share bar has reduced in size by 10 per cent, and costs the same. Picture: Matt Cardy/Getty Images.A Cadbury Dairy Milk share bar has reduced in size by 10 per cent, and costs the same. Picture: Matt Cardy/Getty Images.
A Cadbury Dairy Milk share bar has reduced in size by 10 per cent, and costs the same. Picture: Matt Cardy/Getty Images.
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Speaking to Sky News, a spokesman said: ‘We're facing the same challenges that so many other food companies have already reported when it comes to significantly increased production costs - whether it's ingredients, energy or packaging - and rising inflation.

‘We understand that consumers are faced with rising costs too, which is why we look to absorb costs wherever we can, but, in this difficult environment, we've had to make the decision to slightly reduce the weight of our medium Cadbury Dairy Milk bars for the first time since 2012.’

The spokesman added the chocolate bar is still competitive, reducing from 200g to 180g, and costing £2.

Shrinkflation of this kind is becoming more common, but what is causing it, and what products have been affected so far?

What is shrinkflation?

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Shrinkflation gets its name from the increase in the price of a product compared to its weight.

The Dairy Milk bar reducing in size is a perfect example of shrinkflation – where a product reduces in size but the cost is the same.

This lowers the value of products to the customer.

What is causing it?

A myriad of reasons have been used to explain why shrinkflation is happening.

In Cadbury’s case, it is the raising costs of production – whether it is from the supply chain or raw materials.

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According to The Financial Times, rising inflation, labour shortages, complications in the supply chain, and increased post-pandemic demand, have all caused the trend to become more prominent.

Recently, Russia’s invasion of Ukraine has put a squeeze on food supplies, and has contributed to rising energy costs.

Both of these factors are increasing expenses, which some businesses are passing onto the consumer through price rises, or product size reductions.

With the current challenges to the cost of living, shrinkflation may become a more noticeable trend.

What other UK products have been affected?

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Several companies have been caught making their products smaller while maintaining its price.

In October 2021, Walkers cut two bags of crisps from its multipacks, from 24 to 22.

The price was kept at £3.50.

From the same time period, Smith’s Frazzles and Chipsticks lowered the amount of bags in a pack from six to eight, with the cost staying at £1.

These companies are not the only ones to adopt shrinkflation, with supermarkets either adopting the practice, or increasing prices alone.

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Consumer advice brand Which? found several categories of products with price differences.

One example was Asda hiking the fee of its own brand soda water, sugar free Indian tonic water, and its regular alternative, from 35p to 60p.

This resulted in a 71 per cent increase.

Speaking to The Guardian about shrinkflation, Steve Dresser, an analyst at Grocery Insight, said: ‘Ultimately the customer, despite not paying more, is not getting the same value, so they lose out.’

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