“Shrinkflation” – pay the same, get less

Recently, shopping in discount stores or supermarkets in Germany and elsewhere has become more and more expensive. At the same time, certain products are also getting lighter. In times of rising prices for commodities and record energy costs, producers are having to make difficult choices to stay profitable, including reducing the weight or quantity of certain products whilst maintaining or increasing the price, a phenomenon often referred to as “shrinkflation”.

How does "shrinkflation" affect packaging?

To ensure that products with changed quantities are placed on the shelves as unnoticed as possible, the respective changes in quantity or weight are often made by completely redesigning the packaging. However, companies wishing to redesign packaging to accommodate a reduced quantity or weight of a product should take note that certain legal requirements will apply. In Germany in particular, the Act of Unfair Competition (UWG) as well as the German Weights and Measures Act (MessEG), must be observed.

In this article, we take a closer look at some of the most important requirements that companies in Germany should generally observe when redesigning their packaging. However, generalised statements cannot be made here, as the permissibility of the respective packaging is assessed, as usual, based on each individual case.

Legal considerations when redesigning product packaging

1. Accurate provision of information

In principle, companies must always provide accurate information about the number, size, volume or weight of the product, otherwise it may constitute unlawful misleading information about the quantity pursuant to sections 3, 5 para. 2 no. 1 UWG. In addition, according to section 43 para. 1 MessEG, the nominal quantity must be indicated on pre-packages and must comply with the specified requirements. Furthermore, according to section 42 para. 2 MessEG, the external design of a package must not suggest a larger filling quantity - be it by volume, weight or number of pieces - than is actually present. A violation of these regulations may constitute an anti-competitive behaviour according to section 3a UWG.

2. Accurate presentation of packaging

Information required under § 5 para. 1 sentence 2 no. 1 UWG may be explicit but may also be the packaging of a product itself. Therefore, even if the weight or number of pieces is indicated correctly, it may still be misleading if the average informed and reasonable consumer expects a considerably larger quantity due to the way the packaging is presented.

German case law indicates that packaging for comparable products generally leads to the expectation of a larger quantity of goods (German Federal Court of Justice, decision of 10.11.2017 – I ZR 78/16; decision of 30.10.1981 – I ZR 156/79; Higher Regional Court of Hamburg, judgement of 25.02.1016 – 3 U 20/15). While the average informed and reasonable consumer is generally aware that different products may have different filling quantities (for example, vacuum-packed coffee compared to a bag of chips), if product packaging has been intentionally designed to be significantly larger than the size of the product inside so as to give the appearance of better value, this could be deemed to be a misleading practice.

How to avoid misleading information/statements?

Misleading information may be avoided by clearly stating the filling quantity on the packaging. However, this must be designed in a particularly eye-catching way to be perceived accordingly by the relevant consumers (Higher Regional Court of Karlsruhe, decision of 22.11.2012 – 4 U 156/12).

Furthermore, it is possible to exclude misleading information through “proper design” of the packaging, as in these cases the consumer can obtain further information by looking at and touching the packaging. Previously, a proper design was assumed in the case of transparent material. However, the prerequisite here was that the product was not so new that consumers were unable to gain a sufficient idea despite being able to look inside. Thus, what is required is a corresponding consumer expectation that the public can recognize the actual quantity involved, e.g., the amount the consumers can get out of the given quantity (Higher Regional Court of Hamburg, decision of 12.11.2003 – 5 U 45/03).

In addition, the use of soft pre-packaged goods and the indication of the filling quantity on the packaging may avoid misleading the consumer into believing that the packaging is filled to the brim with goods if, for example, the consumer can determine by touching soft pre-packaged goods that they also contain air and can see through a window that the packaged goods move when shaken (Higher Regional Court of Frankfurt a. M., decision of 21.10.2008 – 14 U 240/07). Also, under certain circumstances, a misleading statement can be ruled out by showing the contained product in its original size.

Misleading despite indication of filling quantity

Nevertheless, there are still various ways in which misleading statements cannot be avoided despite correct indication of the filling quantity, for example:

  • If a consumer cannot or can hardly recognise the substantially reduced content due to the outer packaging alone. This was held in the case of the wrapping of a round inner packaging by a square outer packaging with the result of the outer dimension of the packaging being more than twice the size of the inner packaging and was therefore hardly perceptible from the outside (Higher Regional Court of Karlsruhe, decision of 20.03.2015 – 4 U 196/14). This was also found to be true of a round outer packaging whose plastic insert - not visible from the outside - tapered towards the bottom and had an indentation on the side (Higher Regional Court of Karlsruhe, decision of 22.11.2012 – 4 U 156/12);
  • A misleading statement may also be considered if the filling quantity of a product is reduced without changing the packaging and contrary to previous practice, but the price is not reduced to the same extent (Appellate Court of Berlin, decision of 19.07.1994 – 2 Ss 169/93 – 5 Ws (B) 324/93; Regional Court of Frankfurt a. M., decision of 18.04.2001 – 3/8 O 165/00); and
  • The indication of the filling quantity is not sufficient to avoid misleading the average consumer if, as in the case of concentrated edibles, it is not the filling quantity but the indication of the yield that is of interest (Regional Court of Hamburg, decision of 19.01.2004 – 315 O 313/03).

However, if the oversizing of packaging is necessary for technical or economic reasons, in some cases the interest of the general public in an innovation brought by the improvement may be so significant that a merely minor risk of misleading the public may be outweighed (German Federal Court of Justice, decision of 30.10.1981 – I ZR 156/79).

Conclusion

Packaging should, as far as possible, not mislead the consumer into assuming that it contains more than it really does. Additionally, the packaging should always provide information about the actual contents in a prominent and consistently accurate manner. Any further information that clarifies the information for the consumer is also recommended. If packaging is found to breach legal requirements, not only will the company be subject to claims for injunctive relief, removal and damages, but it may also suffer considerable reputational damage and loss of sales.

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