Several companies have been using shrinkflation to rip off customers for years. In 2015, Pepsi and Coca-cola effectively utilized the strategy until Bigi and Big Cola disrupted the market—a move that reversed both household brands into default setting.

However, Pepsi and Coca-cola aren’t the only fast-moving consumer goods makers involved in shrinkflation as this deceptive but legal activity dates back to over a decade in the Nigerian market.

Shrinkflation is a word coined from shrink and inflation. It simply implies a reduction in the quality or quantity of a product with the product price remaining the same. In the case of Nigeria, product price increases without justifiable reasons given by manufacturers. This is common among FMCG firms even with regulators’ connivance. Thus it is the act of giving customers less value for their money.

Shrinkflation is how some companies pass on costs of production to their customers in a manner that is not usually noticeable. It is deceptive from the customers’ perspective. But in the business world, it is a legal concept particularly in Nigeria where consumer protection is weak.

Why brands engage in shrinkflation

When companies’ production costs rise, they often put the burden on customers to cut back operation expenses. One of their most effective methods is the reduction of products’ quality and quantity while the price remains unchanged.

Companies prefer this strategy because it’s less visible to non-discerning customers since the difference is usually small or unnoticeable unlike price increments which can’t go unnoticed by customers.

Occasionally, brands opted for shrinkflation over fears that price hike will provoke customers to switch loyalty to their competitors who maintain their prices though they may have reduced their product sizes.

One reasons given by customers or loyalists of a particular brand when such brand reduce the quality or size of its product is economy. They often cited the unhealthy economic situation in the country for sharp practices or misdemeanor by manufacturers or any other individual.

For instance, the 2016 Cola War in Nigeria brought to fore the... https://nairametrics.com/2019/07/30/how-food-and-beverage-firms-rip-off-consumers-with-shrinkflation/