If Product Volume Is Secretly Reduced, a Fine Up to 10 Million Won May Be Imposed
A legal foundation to prevent 'shrinkflation,' a tactic that effectively raises prices by reducing product volume, is expected to be established as early as next month.
The Korea Fair Trade Commission (KFTC) announced that it will introduce regulations related to consumer information provision and strengthen monitoring systems to actively respond to manufacturers who substantially increase prices of daily necessities by changing volume, ingredients, and other factors.
Due to prolonged high inflation and economic stagnation, some companies are increasingly using shrinkflation and skimpflation tactics?reducing product volume or lowering quality while keeping prices the same?to raise prices covertly. According to the Korea Consumer Agency, shrinkflation occurred in a total of 9 categories and 37 products over the past year.
In response, the KFTC is pushing to amend the "Designation of Unfair Consumer Transaction Acts by Business Operators" to classify changes to important product details such as volume without notifying consumers as unfair business practices, and to impose fines for violations.
Once the amendment is implemented, if important details such as volume are changed, the information must be disclosed on the packaging, the manufacturer’s website, or at the point of sale, and notified to the Korea Consumer Agency. Violations will incur a fine of 5 million KRW, and a second violation will result in a fine of 10 million KRW.
The amendment will collect opinions from various sectors through administrative notice until the 16th, and after regulatory review procedures, it is expected to be promulgated as early as next month. If no grace period is set, it will take effect next month.
The related monitoring system will also be strengthened. The KFTC will establish a volume change monitoring system for about 10,000 products distributed in large supermarkets through voluntary agreements with distributors, and from this year, the Korea Consumer Agency will expand the scope of its price comparison surveys and conduct regular volume inspections.
Additionally, by promoting monitoring projects for items outside the price comparison survey through consumer organizations, the KFTC plans to provide consumers with broad and detailed information.
The KFTC expressed its expectation that "through various measures against shrinkflation, information on changes to important details such as volume will be effectively communicated to consumers, making it easier for them to make rational choices."
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