Manufacturers are dealing with rising raw ingredients prices by cutting the size of the unit on offer.
Scottish and Newcastle, which brews Strongbow, admitted it cut the number of cans in a case from 18 to 15 because of costs. Other cuts include Cadbury\’s "family share" sized chocolate bars dropping from 250g to 230g and Waitrose minced beef packs being reduced in size from 550g packs to 500g. The decision on whom to give your last Rolo has been made that little bit harder after maker Nestlé cut the number in a packet from 11 to 10.
In an entirely rational world a rise in price or a reduction in quantity would make no difference. But this is interesting evidence of the way in which manufacturers at least believe that we\’re not entirely rational as consumers. Price points matter. 99p for a smaller bar makes us more likely to buy than 1.04 for the old sized bar. Whether this is true or not of course I don\’t know: but those most closely involved, the manufacturers, believe that it is.
Mark Gerken, the managing director of off-trade at Scottish & Newcastle UK, said: "The decision was brought about by our need to raise wholesale prices and retailers\’ desire to continue to offer Strongbow in a similar party-pack format at the same price point."
A Cadbury\’s spokesman said: "We seek to keep our confectionery affordable to offer value for money, and therefore we have slightly reduced the size on some of the larger sharing packs."
What\’s the technical name for this? The money illusion? It\’s the same thing that makes cuts in nominal wages so hard, while rising nominal wages which are being eroded by inflation to mean that real wages are still falling is a great deal easier.
However, this is nonsense:
The manufacturers involved have defended the size reductions, saying they wanted to avoid passing on cost increases to consumers.
That\’s just corporate wibble. Whatever our own reactions to changes in size but the same price points, we\’re still paying those increased costs.