FOOD PRICE INFLATION 2

Supermarkets and leading food companies have reduced the size of their products but failed to pass on cost reductions to their customers. In an effort to beat the recession, Tesco, Sainsbury’s, Asda and Ocado are selling smaller portions of popular brands, including biscuits, beer, crisps and ice cream. However, prices have remained the same and, in some cases, the cost has increased while the packet size has shrunk. Pampers, Birds Eye, Terry’s, Green & Black’s, Nestlé and Coors are among the big name brands that have reduced the weight of some of their products over the summer. Some supermarkets have also changed their own-brand packet sizes.

Jonny Steel, spokesman for mysupermarket.co.uk, the grocery shopping and comparison site that conducted the research, said, “Food manufacturers are trying to help consumers by reducing the frequency of price increases, but unfortunately they are sometimes doing this by downsizing their products. This leaves shoppers paying the same amount of money as they were before the pack revamp, while getting less in return. At a time when hard-working families are struggling to pay their bills, buyers should shop around and be aware of this practice.” At Sainsbury’s, a beef and tomato Pot Noodle was 85p for 96g. Now it sells at 88p for 90g.

In Tesco, there were 20 biscuits in the Value milk chocolate digestive bars before the summer. Now there are 18 but the price is a static £1.03. A Tesco spokeswoman said, “We always work hard to offer customers the best possible value at the lowest possible price. In this instance, the Tesco Value chocolate digestives became an 18-biscuit pack as part of a routine range review. This happened to coincide with an increase in commodity costs.” While manufacturers occasionally increase product size, researchers say that it is not common. When it does happen, it is normally part of a short-term offer and manufacturers are quick to label the new size.

A spokesman for Unilever, which makes Pot Noodle, said, “Over the summer we reformed our range of Pot Noodle products to give consumers an enhanced taste hit. As a result we made some changes to the seasoning blend in each pot. The changes represented the majority of the reduction in overall weight of the beef and tomato product. At no time this year have we changed the price of Pot Noodle to retailers. Any changes to the prices in stores will have been implemented by retailers.” Weight Watchers, which sells a range of low-calorie food, said that it had reduced the weight of its popular Cookies & Cream sundaes after customer requests for smaller pots.

When asked about the absence of a price reduction, Jane Leeds, marketing manager for Weight Watchers, said, “We are not a UK manufacturer, our products are imported. We are exposed through the euro, that’s the issue for us. At the end of the day, we have got to sustain the business.” Kraft Foods, which owns the Terry’s Chocolate Orange brand, has reduced the weight of its Chocolate Orange Segsations this year. A spokesman for the company said, “Chocolate selections in tins are seasonal products, which are sold to headline prices determined by retailers, such as ‘two for £10’."

He added, "It’s an intensely competitive market and we decided to stop selling chocolate selections in tins this year because it was no longer commercially viable for us as a relatively small player. In response to customer requests to continue offering Terry’s Chocolate Orange Segsations in tins, we proposed a smaller 700g pack as a commercially viable option. The weight is marked on the tin, which is visibly smaller.” Food experts said that the supermarkets and manufacturers should do more to make sure that consumers know what they are getting for their money.

When asked why it had not cut the price of Birds Eye Chicken Chargrills, despite a weight reduction in the pack, a Sainsbury’s spokesman said, “On this particular item, the price we pay to the supplier hasn’t changed, so the price we charge our customers has stayed the same.” In response, a Birds Eye spokesman said, “Like other food manufacturers, at the beginning of this year we faced significant cost increases due to raw material inflation and exchange rates. As brand leader, we understand the pressures our consumers are under and work incredibly hard to ensure we continue to offer great value.

Richard Watts, campaigns director of Sustain, the alliance for better food and farming, said that it came as “no surprise that shops don’t feel the need to be more upfront with the changes they are making”. Mr Watts added, “You could argue that is it up to shoppers to check what they are buying before they buy it. But they can only do that if everything is clearly labelled. People need to be given a fair chance to understand what they are buying.The food industry needs to be more up-front with people.” (Source: Times Online, Oct/09)

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