Democrats Call Out Shrinkflation Practices in Food and Beverage Industry

Democrats Demand Action on Shrinkflation

Two Democratic lawmakers have sent a letter to some of the country’s biggest food and beverage companies arguing they are profiteering through shrinkflation, the practice of reducing product size while keeping prices the same or increasing them, and "dodging taxes." Sen. Elizabeth Warren (D-Mass.) and Rep. Madeline Dean (D-Pa.) wrote a letter to the CEOs of Coca-Cola, PepsiCo and General Mills to demand their companies stop engaging in the practice.

The letters were sent Sunday to the executives and was first reported by NBC News.

Exploitation by Size Reduction

“Shrinking the size of a product in order to gouge consumers on the price per ounce is not innovation, it is exploitation,” the Democrats wrote in their letters. “Unfortunately, this price gouging is a widespread problem, with corporate profits driving over half of inflation.”

• Coca-Cola made $13.4 billion with an average effective tax rate of 13.5%;
• PepsiCo earned $22.4 billion, paying 15%;
• General Mills recorded $12 billion in profits with a tax rate of 14.8%.

“No corporation should pay a lower tax rate than working Americans – especially when that same corporation turns around and gouges consumers on the other end through shrinkflation,” the lawmakers said.

Examples of Shrinkflation

In their joint release, the lawmakers noted that General Mills has reduced the size of its Cocoa Puffs family size box from 19.3 ounces to 18.1 ounces while maintaining the same price. Likewise, PepsiCo has replaced its 32-ounce Gatorade bottle with a 28-ounce size at the same price point.

Coca-Cola has “openly told its shareholders” it had “earned the right” to increase prices due to its market power, the release stated.

The Hill has reached out to the companies for comment.