New regulations mandate product size reductions be clearly labeled, with fines for non-compliance

South Korea’s antitrust regulator, the Fair Trade Commission (FTC), has announced that food manufacturers and suppliers will be required to disclose any reductions in product sizes, a practice commonly referred to as “shrinkflation.” Starting in August 2024, companies that cut the size of their products while maintaining the same prices will face penalties if they fail to inform consumers.

Under the new rules, manufacturers of processed foods and household items, such as toilet paper, shampoo, and detergents, must display a label for three months if their product downsizing results in a higher unit price. Companies caught violating the regulation will be fined 5 million won (S$4,940) for a first offense and 10 million won (S$9,880) for a second.

The FTC stated that the move aims to protect consumers from unknowingly paying more for smaller quantities of goods, as shrinkflation often leads to a higher unit price without proper notification. The regulations seek to address the growing concerns over rising living costs and the shrinking value of consumer products amid inflationary pressures.

The new rule comes as governments and consumers worldwide grapple with the challenges of shrinkflation, which has become a major issue in many economies as inflation continues to erode purchasing power. The FTC’s decision reflects South Korea’s efforts to ensure fair trade practices and enhance consumer protection.