Read the article below, and comment on the ethics of changing a product in lieu of changing the price – to disguise the price of a product.
50 Words: Comment on WHO (the typical shopper) this affects – what is the demographic of who will be fooled by this type of price change.
50 Words: Give an example you have seen where the producer changes the price in an unethical way. (Examples can include similar instances of changing packaging, or when you buy a car, charging for “extras” such as rustproofing, or when a cell phone distributor sells you “insurance” on a phone, but does not tell you there is a deductible for the coverage).
Less for your dollar
Manufacturers squeeze out profits by shaving down contents
By Donna Goodison | Monday, October 18, 2010 | http://www.bostonherald.com | Business & Markets
![Changing Price by Changing Volume]()
Toilet paper sheets are getting smaller. Packages of Double Stuf Oreo have about four fewer cookies, and half-gallon containers of orange juice have been squeezed to 59 ounces.
The products on our grocery store shelves are shrinking in size, and, more and more, we’ re paying the same or higher prices for less. And it’s a trend that hits consumers harder during tough economic times that require penny-pinching.
“Downsizing is a sneaky way to pass on a price increase, because they change the product really in almost indistinguishable ways,” said Somerville consumer advocate Edgar Dworsky, founder of ConsumerWorld.org. “Maybe the package stays the same, maybe the package changes slightly, but you’ re getting less for the same money. In essence, ounce for ounce, pound per pound, you’re paying more.”
Faced with higher costs for everything from ingredients to production, manufacturers refrain from increasing the cost of, say, a 19.8-oz. box of Cookie Crisp cereal, to avoid complaints from shoppers more apt to notice a price hike. Instead, they keep the price steady, but reduce the cereal box to 15.6 oz. – and hope consumers don’t detect there’s 20 percent less product.
Take the half-gallon container of OJ. Sixty-four ounces has long been a traditional size, but, if you look closely, 59 oz. is becoming the new norm.
When Tropicana switched to 59 oz., it kept the 64-oz. container but filled it with less juice, while keeping the same price.
“So, unless you looked at the tiny print, you had no idea you were getting 5 ounces less,” Dworsky said. “That’s really sneaky, and it might also be a case of slack fill.”
“Slack fill” is over-packaging – the difference between the container’s actual capacity and the volume of product it contains. Under U.S. Food and Drug Administration regulations, a container that doesn’t allow consumers to fully view its contents is considered misleading if it contains nonfunctional slack fill. Nonfunctional slack fill is the empty space in a package that’s filled to less than capacity for reasons other than the protection of the contents; the requirements of machines used to enclose the contents; unavoidable product settling during shipping and handling; or the need for the package to perform a specific function, such as a role in the preparation of food, and when the function is clearly communicated to consumers.
Florida’s Natural, meanwhile, reduced its half-gallons of OJ to 59 oz., but also made the container slightly smaller.
“This is an example where the market leader downsizes for a certain amount of time and the competitors keep the same, but ultimately cave in,” Dworsky said. “What this really portends is we’re going to see store brands next go from 64 ounces to 59. That’s the usual pattern for how this works.”
Jif peanut butter, though, has been a holdout. While rival Skippy reduced its 18-oz. jars to 16.3 oz. a few years ago, Jif is the last major brand to remain at 18 oz., according to Dworsky.
The 1,000-sheet rolls of Scott Toilet Paper also have been getting smaller and smaller over the years. Originally 4.5-by-4.5-inch sheets, they’re now 25 percent smaller. Scott first shrunk the sheets to 4.5 inches wide by 4 inches long and then to 4.5-by-3.7 inches in 2006. Last month, Scott again trimmed the sheets, this time to 4.1-by-3.7 inches. A four-pack now has almost 42 square feet less of paper, according to Dworsky.
Consumerist.com – a Web site operated by a not-for-profit subsidiary of Consumers Union, the publisher of Consumer Reports – receives at least one example of product shrinkage a day from readers.
Manufacturers know that two fewer ounces, two fewer cookies or a handful less of potato chips allows them to save on raw materials, packaging and shipping, senior editor Chris Morran said.
“Those two ounces add up to a lot to food manufacturers, but the shame is that none of the savings are passed on to consumers,” he said. “The consumers aren’t even being told they’re getting a smaller product. Manufacturers never announce ‘2 oz. less!’ ”
Some recent examples posted on The Consumerist include Wal-Mart’s Health Brand original beef jerky, which has diminished from a 12-oz. package to 10 oz.
“Not only is it 10 ounces, but it now has a (strip) across the center of the packaging that says ‘Mega Pack,’ as if it’s some sort of bonus-size thing,” Morran said.
Once 4.8 oz., boxes of Pasta Roni are now 4.6 oz. Betty Crocker’s Turtle brownie mix, previously a 20.75-oz. package that made a 9-by-13-inch pan of brownies, is now 17.6 oz. for an 8-by-8-inch pan.
Bottles of liquid Dial hand soap have shrunk from 11.25 oz. to 9.375 oz., but the smaller bottles are taller, albeit more slender, than the older ones.
“It has a little burst with ‘new’ on it – so you think you’re getting something new and that you’re actually getting decent volume because it’s not as squat as the old bottle, but you’re getting 17 percent less,” Morran noted.
Product shrinkage isn’t new, but it’s now really commonplace, and more astute consumers are taking greater notice. And The Consumerist is hearing complaints from its readers that it’s screwing up their recipes.
“More people are trying to save money by making their own food,” Morran said. “But they can’ t even do that, because the recipes don’t work or they require additional math because the standards have changed.”
Morran uses chicken stock as a hypothetical example. If a recipe calls for two cups, or 16 oz., and the cans, because of shrinkage, are now 14 oz., that’s the dilemma.
“Either you have to completely rework the recipe and do some very complicated math, or you have to buy two cans of chicken stock to make up those two ounces,” he said.
Article URL: http://www.bostonherald.com/business/general/view….
