"Shrinkflation" Verdict: Iglo Loses Before OLG Vienna
The occasion was the frozen product "Iglo Atlantic Salmon," whose content was reduced from 250 to 220 grams without it being clearly recognizable to consumers. The Association for Consumer Information (VKI) filed a lawsuit on behalf of the Ministry of Social Affairs and was upheld in the second instance by the Higher Regional Court (OLG) Vienna. The judgment is final.
VKI: First Judgment on Shrinkflation, Signal Effect for the Entire Market
"The judgment is a strong signal against anti-competitive practices where price increases are hidden and consumers are systematically misled," said VKI Chief Legal Officer Petra Leupold in a statement. "At the same time, this is the first judgment on the legal admissibility of shrinkflation practices." The lawyer attributes a "signal effect for the entire market" to the judgment.
According to the courts, the average consumer expects an unchanged product for the same price, writes the VKI. If the content is reduced without it being clearly recognizable to consumers, there is deception about the price and nature of the goods. The fact that the actual, lower content was correctly stated on the packaging does not change the courts' view of the deception.
Iglo: Transparency Towards Consumers is Our Central Concern
"We acknowledge the decision of the Vienna Higher Regional Court. Transparency towards consumers is a central concern for us," said Iglo in a statement. "Even before the announcement of the OLG decision, we had already increased the product's filling quantity back to 250 grams due to the easing of raw material prices," the company further stated. The temporary reduction in filling quantity was due to increased raw material prices, and the adjusted net filling quantity was clearly indicated on the front of the packaging.
Iglo still sees legal uncertainty regarding whether, how, and over what period a change in quantity should be additionally marked. "We welcome an industry-wide clarification and a constructive dialogue on practical and consumer-friendly solutions - as already announced by the government."
Law Against Hidden Price Increases to Come
"I keep saying it: Those who cheat, lose. The verdict against Iglo clearly shows that shrinkflation is a deception and has legal consequences," commented the responsible State Secretary Ulrike Königsberger-Ludwig (SPÖ). "Now it's about drawing the right consequences. The federal government will draft a bill to ensure transparency at the checkout here as well."
The so-called "shrinkflation," where the package sizes of products shrink while the price remains the same or even increases, is currently causing discussions. For consumers, these de facto price increases are often difficult to recognize. The Ministry of Economic Affairs recently announced a law against hidden price increases. A corresponding legislative proposal is to be developed this year.
(APA/Red)
This article has been automatically translated, read the original article here.