Congress Democrats push to stop ‘shrinkflation’ and target major food companies for the practice
Two Democratic congresswomen are demanding that Coca-Cola, General Mills, and PepsiCo stop “profiteering” by shrinking the size of their products without lowering prices.
Massachusetts senator Elizabeth Warren and Pennsylvania representative Madeline Dean wrote letters to the three food and drink giants on Sunday calling for them to pay their fair share of taxes and cease engaging in “shrinkflation.”
They accused all three companies of reducing the size of their products, such as General Mills’ Cocoa Puffs and PepsiCo’s Gatorade, while charging the same price or higher – a stealthy twin of inflation that Joe Biden has denounced as “a rip-off.” Shrinkflation is one common alternative to raising costs for companies under pressure from – or, if you believe their critics, hoping to exploit – the general rise in costs during times of high inflation.
“People have noticed that their box of Cheerios and bag of Doritos are smaller, but prices are higher – and at the same time these giant corporations are paying lower tax rates than the average American,” Warren told NBC News, which first reported the letters.
“We can’t let them get away with this price gouging and tax dodging. It’s just plain wrong, and we’re fighting back.”
Spokespeople for the three companies did not immediately respond to requests for comment from The Independent. But the Consumer Brands Association, a trade group that includes all three firms, told NBC that the attacks were “misleading”.
“Aggregate markups over the past three years are not unusual compared with previous economic recoveries,” a spokesperson for the group reportedly said, citing a recent report from the Federal Reserve Bank of San Francisco. “The industry remains focused on providing the best products at the most competitive price to consumers.”
A report last December by Democratic senator Bob Casey found that shrinking package sizes accounted for around 10 percent of the increase in price per unit for household items (such as toilet paper) and snacks (such as corn chips and Oreos).
In their letters, Warren and Dean also zoomed in on the 2017 tax cuts championed by Republicans and signed into law by Donald Trump, which they argue “incentivized price gouging” by reducing the taxes that companies could expect to pay on every extra dollar they charged.
The congresswomen asked Coca-Cola, General Mills, and PepsiCo to respond stating the average price per ounce of soda or cereal that they have charged every year since 2018, how much more in federal taxes they would have paid if not for the 2017 cuts, and whether company executives had gotten any extra compensation while inflation was at its highest.
