September 2024

by Ana-Maria Baciu and Cristina Stoica

Starting October 10, 2024, economic operators must comply with new rules to ensure that consumers are correctly, fully, and precisely informed about pre-packaged products whose quantities have been reduced without a corresponding drop in price. The National Authority for Consumer Protection (‘ANPC’) Order no 539/14.05.2024, published in the Official Gazette on September 10, 2024, lays out measures aimed at combating the phenomenon of ‘shrinkflation’ and establishing a clear legal framework for economic operators selling consumer products on store shelves.

What is ‘Shrinkflation’ and why does it matter?

‘Shrinkflation’, a term derived from combining ‘shrink’ and ‘inflation’, describes a common practice seen not only in Romania but also in other countries, including the USA and EU member states. It refers to reducing the quantity of a product without a corresponding reduction in price, meaning that consumers pay the same but get less. Sometimes, this reduction is disguised through subtle changes in packaging or a seemingly improved nutritional value (by reducing calories), which is, in fact, the result of a smaller quantity being sold at the same price. Criticism of these practices has been quick to surface, prompting consumer protection authorities to propose a simple solution: clear and complete consumer information at the point of sale.

What are the requirements of the Order?

ANPC requires economic operators to ensure a high level of transparency for consumers regarding pre-packaged products that have undergone a reduction in volume or weight but are presented on the shelf in identical packaging and at the same price as before.

Concretely, economic operators must clearly display the price per unit of measurement to which the change in volume or weight of the product applies. Moreover, consumers must be informed in a visible manner that the product has been altered in terms of quantity, even if the sale price remains unchanged.

This information must be placed in the same visual field, in a visible and legible format, using the specific message available in the Order’s annex, and must be maintained for at least 30 days from the date the product is placed on the shelf.

While the Order does not explicitly state this, the weight or volume indicated on the packaging must always reflect the actual quantity of the product.

One aspect that remains somewhat unclear in the Order is the requirement for fully informing the consumer about the price increase per unit of measure (volume or weight) while maintaining the same product price.

What is the area of applicability of the Order?

The Order applies to both food and non-food products, but only to pre-packaged goods. While these regulations do not cover distance sales and do not specify any particular sanctions, their impact on the market is significant. The reason why distance sales are excluded is not explicitly mentioned in the text, suggesting that this might be just the first step toward a more comprehensive regulation.

This regulation is similar to those in France and Italy (2024), which also focus on informing consumers about the price of products with reduced quantities, but it is not identical.

• The French legislative framework explicitly excludes pre-packaged food products with variable quantities and unpackaged (bulk) products, focusing on those sold in constant quantities (e.g., 1 kg package, 1-liter bottle).

The French regulation, applicable to stores larger than 400 square meters, adds an extra layer of transparency by allowing information about the quantity reduction and price increase per unit of measurement to be displayed directly on the packaging. Compared to the Romanian approach, the French method of specifying the price increase in percentages (%) or euros offers significantly greater transparency and clarity for consumers when making purchasing decisions.

• The Italian regulation requires information on quantity reduction to be maintained for two months and applies to both large and medium-sized stores.

While retailers are directly impacted, producers and distributors may also feel the pressure to adjust their prices or commercial strategies to avoid sales declines and stay competitive. In this context, it is advisable for retailers to review their purchasing contracts with suppliers, to include specific clauses that ensure compliance with the new regulations. A proactive approach in this direction not only prevents legal risks but also creates a clearer and more efficient collaboration framework across the supply chain.

‘Skimpflation’ – a new wave of challenges

While ‘shrinkflation’ is currently attracting the attention of regulators, another phenomenon, ‘skimpflation’, is gaining momentum worldwide. In this case, economic operators cut back on the quality of their products and/or services while keeping prices unchanged. It remains to be seen whether ANPC or other relevant authorities will introduce measures to combat this phenomenon as well, ensuring comprehensive protection for consumers directly affected by such changes and providing economic operators with a fair, predictable, and easy-to-implement legal framework.

***

In a constantly evolving market where consumers are becoming more informed and demanding, transparency and fairness are not just legal obligations but smart business strategies. ANPC has the responsibility to provide a clear and predictable legal framework that protects both consumers and economic operators. The latter must understand how to apply these regulations to ensure high consumer protection standards without the risk of non-compliance due to lack of clearer guidance. Ultimately, consumers, producers, and retailers all benefit when the rules of the game are clear, fair, and respected by everyone.

To learn more about BACIU PARTNERS’ Retail, Consumer Protection and Advertising practice, please follow the link available HERE.