Producers resort to shrinkflation to keep profit level unaffected

Many producers resorted to 'shrinkflation -- a situation where quantities of goods in packs are reduced keeping the prices constant -- to maintain margins without alienating customers.

Under such system, firms surreptitiously reduce pack sizes while keeping the prices unchanged.

This shrinkflation bid in the country is mostly seen in food and consumer items like beverages, ballpoint pen, potato chips and match boxes.

People familiar with the manufacturing of the goods told the FE that they were also taking recourse to this business practice in order to retain the customers amid the open-market economy wherein the substitute products are available on the international market.

Some experts opine that there should be investigation by an appropriate authority into this kind of unethical practice on the part of unscrupulous traders to see how much they [producers] benefit from shrinkage of product packs in what is known as shrinkflation.

Shafiqul Islam Laskar, director-general at the Directorate of National Consumer Rights Protection (DNCRP), said: "We're not aware of it."

Bangladesh Tariff Commission fixes prices of some key goods while most others remain out of its reach.

On the other hand, manufacturers said they are not cheating people rather such tactics help them retain customers and keep inflationary pressures contained.

Authorities of soft-drink groups said they tried to absorb inflation as it could be done through such mechanism by maximizing sales apart from other marketing tools.

Mohiuddin Monem, a director at Abdul Monem Ltd that mainly markets popular beverage brand Coke outside the capital, told the FE that they were now selling the drink weighing 200ml in glass bottles keeping its retail rate unchanged at Tk 15.

Earlier, the same was 50ml higher and the price was the same at Tk 15.

Similarly, a ballpoint pen is now being sold at retail level at Tk 5.0 a piece for long despite the fact that the prices of its ink on the international market rose much higher. They use the imported ink mainly from China and India.

Once a ball pen used to last for a longer time and now it ends quickly.

They said the Tariff Commission of Bangladesh, a government-run organisation which suggests prices of some goods and recommends duties on the imports considering the interests of local industries, had been asking them for long to keep the pen price the same.