President Biden, in his State of the Union address Thursday night, urged Congress to ban “shrinkflation” — the practice of reducing product size or quantity without lowering the price — in food and other consumer goods. “Pass Bobby Casey’s bill and stop this,” said Biden, referring to Sen. Bob Casey of Pennsylvania.
Casey, the Democratic chair of the Senate Health Committee, filed legislation last week to declare shrinkflation a deceptive trade practice and to empower the Federal Trade Commission and state attorneys general to pursue civil actions against companies that engage in the practice.
“Corporations are trying to pull the wool over our eyes by shrinking their products without reducing their prices — anyone on a tight budget sees it every time they go to the grocery store,” said Casey when he filed the bill.
Republicans said the administration was trying to dodge the blame for high inflation in 2022 and 2023. Data collected by the Bureau of Labor Statistics on product size and prices indicate shrinkflation accounted “for less than 2 percentage points of the overall price increases,” said Republican staff on the Senate Agriculture Committee. The report said excessive spending was the cause of inflation.
Food inflation, which peaked at 11.4 percent in August 2022, was 2.6 percent in January, lower than the annualized U.S. inflation rate of 3.2 percent.
“Too many corporations raise their prices to pad their profits, charging you more and more for less and less,” said a feisty Biden during the address. “That’s why we’re cracking down on corporations that engage in price gouging or deceptive pricing, from food to healthcare to housing. In fact, the snack companies think you won’t notice when they charge you just as much for the same size bag but with fewer chips in it. No, I’m not joking. It’s called shrinkflation.”
The president saluted Agriculture Secretary Tom Vilsack while pointing to administration projects to provide rural access to high-speed internet and to create new revenue streams for farmers, including carbon markets and climate-smart commodities.
“Because of my investments in family farms, led by my Secretary of Agriculture, who knows more about this than anybody I know, we’re better able to (keep farms) in the family, and their children and grandchildren won’t have to leave home to make a living,” said Biden.
To read the text of the speech as prepared for delivery, click here.