By Michelle Grattan in Canberra

The Albanese government will tackle “shrinkflation” in supermarkets and potentially other parts of the retail sector.

This is where the product’s size is reduced but the price stays the same, or the price is cut by less than the reduction in size. The practice has become increasingly common.

The government will strengthen the Unit Pricing Code so people can make better comparisons.

It will also bring in “substantial” (but unspecified) penalties for supermarkets that breach the code.

Consumer group CHOICE has identified Easter products, breakfast cereals, chips and cleaning products among items that have recently been “shrinkflated”.

“Unit pricing helps consumers spot good value for money while being able to see the price of products by their volume, weight or per unit, so they aren’t tricked by unchanged packaging hiding less product,” the government said in a statement.

The Australian Competition and Consumer Commission’s interim supermarket report, released last week, found nearly nine in ten consumers always or often used unit pricing when deciding on products.

The government said it will consult on improvements to the code such as

• better readability and visibility of unit pricing
• addressing inconsistent use of units of measure across supermarkets
• whether to expand the scope of retailers covered
• requiring more specific prominence and legibility
• improving the use of unit pricing in cross-retailer price comparisons

The ACCC will be given funds for a consumer awareness campaign showing people how they can get the best deals.

The move follows a promise on Tuesday to provide the Commission with an extra $30 million to help it undertake more investigations and take more legal action against supermarkets and other retailers.

The government also promised to work with state and territory governments to wind back planning and zoning restrictions that made it hard for new supermarkets to set up shop.

The interim report of the commission’s year-long supermarkets inquiry, released last week, identified land use restrictions, zoning laws and planning regulations as challenges for aspiring operators attempting to compete with the major chains.

On Monday last week, the ACCC launched legal action against Coles and Woolworths alleging they had breached consumer law by misleading consumers through their “Prices Dropped” and “Down Down” promotions.

In the statement, Prime Minister Albanese said: “Tackling shrinkflation through stronger unit pricing and new penalties is part of our plan to get a better deal for Australians”.

Michelle Grattan, Professorial Fellow, University of Canberra. Republished from The Conversation.