Democrats accuse food, beverage companies of ‘profiteering’ through ‘shrinkflation’
Two Democratic lawmakers have sent a letter to some of the country’s biggest food and beverage companies arguing they are “profiteering” through “shrinkflation,” the practice of reducing product size while keeping prices the same or increasing them, and “dodging taxes.”
Sen. Elizabeth Warren (D-Mass.) and Rep. Madeline Dean (D-Pa.) wrote a letter to the CEOs of Coca-Cola, PepsiCo and General Mills to demand their companies stop engaging in the practice.
The letters were sent Sunday to the executives and was first reported by NBC News.
“Shrinking the size of a product in order to gouge consumers on the price per ounce is not innovation, it is exploitation,” the Democrats wrote in their letters. “Unfortunately, this price gouging is a widespread problem, with corporate profits driving over half of inflation.”
The lawmakers pointed to a recent report by the Institute for Taxation and Economic Policy that found that from 2018 to 2022, Coca-Cola made $13.4 billion but paid an average effective tax rate of 13.5 percent, PepsiCo made $22.4 billion but paid 15 percent and General Mills made $12 billion but paid 14.8 percent.
“No corporation should pay a lower tax rate than working Americans – especially when that same corporation turns around and gouges consumers on the other end through shrinkflation,” the lawmakers said.
In their joint release, the lawmakers said General Mills has shrunk the size of its family size box of Cocoa Puffs from 19.3 ounces to 18.1 ounces while charging the same price and that PepsiCo replaced its 32 ounce Gatorade bottle with a 28 ounce bottle and charges the same price.
Coca-Cola has “openly told its shareholders” that it had “earned the right” to hike prices because its market power, the release said.
The Hill has reached out to the companies for comment.
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