Products Are Shrinking, but Prices Aren't

Companies are passing the rising cost of raw materials along to the consumer

ByABC News
March 21, 2008, 4:54 PM

March 21, 2008— -- If you're heading out for Cadbury chocolates this Easter, bear in mind that the eggs just aren't what they used to be.

Like many popular products, Cadbury eggs have been quietly downsized, but not their price. Whether to sell candy, soap or tissues, marketers are increasingly using subtle but sneaky strategies, displayed throughout the country's supermarkets.

Cadbury isn't alone. Scott says its tissue is softer now, but the sheets are slightly smaller and prices are not. A typical jar of Hellmann's latest mayonnaise is 2 ounces less than it used to be. And a bar of Dial's men's soap, now with a new grip, is .5 ounces smaller.

"The fact of the matter is that what we have here is a situation where the consumer is getting ripped off," said Tod Marks, senior editor for Consumer Reports.

But those who make consumer products said the changes are a matter of necessity. By spending more money on their products' raw materials, as well as on gas to transport their products to stores, manufacturers contend they need to get creative.

"It is our policy to offer the best possible value for consistently high-quality products," said Jody H. Cook, director of product publicity for the Hershey Co., the U.S. business partner for Cadbury eggs. "The costs of most ingredients and packaging materials have been rising as well as costs for marketing and shipping. Despite the weight reduction, we believe our product continues to be an excellent value for the consumer."

To determine what consumers are really getting, senior editor Meg Marco said buyers need to be observant. In addition to considering price tags, unit prices display how much a product costs per ounce.

Meantime, marketers are doing what they can to survive.

"The reduction in size on some bars will only offset a small portion of the cost increases that are being absorbed," Dial said in a statement, adding the company has not taken a price increase on bar soap in more than 10 years. "Dial is committed to ensuring that the products they produce are of the highest quality and value."