The US senator sends a clear message to General Mills, Pepsi, Coca-Cola

Although many argue that the US has some of the largest portions in the world, others have begun to see a drastic reduction in prepackaged foods.

Nothing is more elaborate than buying a bag of chips to enjoy on a Friday night while sitting on the couch watching TV after a long week at work.

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However, upon opening the bag, it’s always disappointing to find that most of it is filled with air and only a third actually contains chips.

Lately, it seems like the packages are getting smaller and the insides are getting emptier, but Americans are still paying the same prices or more than before.

Well, that assumption might unfortunately be correct.

General Mills and Quaker Cereal family size aisle in Publix Florida grocery store.

UCG/Getty Images

Lawmakers crack down on ‘inflation’

On February 28, Sen. Bob Casey of Pennsylvania introduced the Shrinkage Prevention Act to crack down on big corporations that offer fewer products per package without lowering prices. The act allows the Federal Trade Commission to punish companies that engage in these practices.

“Corporations are trying to pull the wool over our eyes by shrinking their products without lowering their prices — anyone on a budget sees it every time they go to the grocery store,” Senator Casey said in announcing the bill.

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According to Senator Casey’s research, inflation rose 14% from June 2020 to June 2022, while corporate profits rose over 74%.

In addition, corporate profits accounted for all inflation from July 2020 to July 2021 and 41% of all inflation from July 2020 to July 2022.

However, production costs have increased due to inflation, making ingredients and packaging materials more expensive than before, which may explain why these companies chose to reduce product size instead of increasing prices.

Elizabeth Warren expresses her frustrations about “coercion” in a letter

Democratic Sen. Elizabeth Warren of Massachusetts and Rep. Madeleine Dean of Pennsylvania are also fed up with this reduction in prepackaged foods and expressed their frustrations in a letter to Coca-Cola on Sunday. (KO) PepsiCo (PEP) and General Mills (GIS) calling on food and drink giants to stop ‘shrinkage inflation’.

Both lawmakers accuse three of the largest U.S. food and beverage companies of using underhand tactics to boost profits by reducing the size of their products and selling less content to their customers at the same or higher price than before the discount.

Senator Warren and Representative Dean also accused food and beverage giants of funding Trump’s 2017 tax bill, which promoted tax cuts, because they wanted to increase profits by raising prices.

According to the letter, within five years of the 2017 tax cut bill, all three companies paid lower taxes, far less than many ordinary citizens paid.

As the letter says, in 2017 General Mills made $12 billion in profits and paid an average tax rate of 14.8 percent, Coca-Cola made $13.4 billion in profits and paid around 13.5% in taxes, and PesiCo made $22.4 billion in profits and paid tax rates of around 15%.

Food and beverage companies are stealthily discounting their products

In the letter, Senator Warren and Representative Dean supported their claims by exposing the tactics of companies promoting “down inflation.”

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In 2021, General Mills reduced the size of several cereal boxes by a few ounces and charged the same price for them. Just a few months later, the company increased its prices fivefold, leaving customers with less product content and much higher costs.

Coca-Cola also joined the downsizing trend by selling less soda at the same price, while PepsiCo reduced its 32oz Gatorade bottles to 28oz and sold them at the same price.

“Reducing the size of a product to drive consumers price per ounce is not innovation, but exploitation,” the letter to PepsiCo chief Ramon Laguarta said, according to NBC News.

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