Milka shrinkflation overview
- Milka reduced the weight of its chocolate bars from 100g to 90g while maintaining similar packaging and increasing the price
- As such a German court found parent company Mondelēz International guilty of shrinkflation deception
- Decision highlights increasing regulatory scrutiny towards shrinkflation
- Risk does not just lie with manufacturers but retailers too
- Brands that rely on consumer trust and familiarity are especially vulnerable to backlash if changes are not obvious
History repeating itself
Ten years ago, Mondelēz faced consumer backlash after redesigning Toblerone bars by increasing the gaps between the chocolate peaks in an effort to reduce costs.
The controversial ‘bike rack’ appearance quickly became one of the most recognisable examples of shrinkflation - where manufacturers reduce the size of a product while maintaining the same shelf price.
A decade later, the confectionery giant has again found itself in a shrinkflation dispute. This month, a German court ruled against Mondelēz after finding that changes to its Milka Alpenmilch chocolate bar risked misleading consumers.
The ruling serves as a warning to manufacturers that, when it comes to cost-cutting measures, regulators are increasingly prepared to side with upset consumers.
What happened to Milka?
In the Milka case, the dispute centred on the company’s decision to reduce the bar’s weight from 100g to 90g while keeping near-identical purple packaging. Although the product became slightly thinner, there was little visible indication to shoppers that they were purchasing less chocolate.
At the same time, the retail price reportedly increased from €1.49 to €1.99. In doing so, the German court ruled that this was deceptive to consumers.
The German court’s reasoning focused heavily on what it described as the “visually conveyed expectation” presented to consumers. In other words, shoppers believed they were buying the same familiar product they had purchased for years, despite receiving less of it.
The ruling suggests that maintaining recognisable packaging while quietly reducing contents may no longer be viewed simply as a commercial decision, but as a potentially misleading practice.
The wider implications on F&B
Although the ruling was issued in Germany, it reflects a wider shift in how regulators and courts may view transparency around product changes.
In the UK, shrinkflation itself is not unlawful. Manufacturers are entitled to respond to rising production, ingredient and supply chain costs by adjusting product size or weight. However, the legal and reputational risk emerges when consumers are not clearly informed that a change has taken place.
This risk does not impact product packaging alone, as the Milka ruling is likely to intensify scrutiny, not only of labelling, but also of advertising and promotional campaigns.
Manufacturers that continue marketing a product using longstanding messaging around size or value or both after reducing its weight and size could face further scrutiny if those claims no longer accurately reflect the product being sold.
Retailers and distributors could also find themselves exposed where in-store promotions, advertising or pricing displays fail to reflect changes clearly.
Under the Price Marking Order, retailers are already required to display price-per-weight information, but the Milka ruling is likely to re-ignite debate over whether those disclosures are sufficiently prominent for consumers to identify changes in value easily.
UK manufacturers must also watch out for The Advertising Standards Authority which has historically taken a strict approach where branding or promotional messaging risks creating a misleading impression of value and unit pricing may come under greater focus.
Alongside this, the Digital Markets, Competition and Consumers Act is expected to allow regulators greater scope to intervene where commercial practices are considered misleading.
As regulatory attention around shrinkflation grows, businesses across the supply chain may therefore need to review, not only packaging, but also the wider marketing narrative surrounding resized products.
Reputational fallout
While the regulatory risks are significant, the reputational consequences could prove even more costly. Consumers are increasingly sensitive to value and transparency amid ongoing cost-of-living pressures, while social media means perceived examples of ‘being ripped off’ can spread rapidly, turning what might once have been a minor complaint into a major reputational issue.
The bottom line
We have seen this take place with Toblerone, where backlash demonstrated how quickly consumers react when they feel a product has been altered without honesty or transparency. The fact that Mondelēz now finds itself facing another shrinkflation controversy perhaps reinforces the perception that brands have failed to learn from previous public reactions.
For UK food manufacturers, the lesson is not necessarily to avoid resizing products altogether. In many cases, reducing weight may remain commercially unavoidable given ongoing inflationary pressures and volatile ingredient costs. However, businesses may now need to rethink how those changes are communicated.
The issue is particularly acute for legacy brands that rely heavily on familiarity and consumer trust. Products such as chocolate bars, cereals and snacks are often purchased quickly and habitually, with shoppers relying on recognisable packaging rather than checking weights and measurements on every purchase. Where changes are subtle, consumers may only realise after purchase that a product has shrunk.
While consumers may not welcome higher prices or smaller portions, transparent communication can help mitigate the perception that they are being misled. When manufacturers change the size of a product, they should make this clear on the front of the packaging, update the design accordingly and communicate the change transparently in their advertising. This transparency is essential not only from a compliance perspective, but also as a matter of brand protection.
Ultimately, the Milka ruling reflects a broader shift in consumer expectations. Shoppers understand that manufacturers face rising costs. What they are less willing to tolerate is the feeling that changes are being hidden in plain sight.
Shrinkflation is no longer simply a pricing strategy but a legal, regulatory and reputational issue that increasingly requires oversight from legal and marketing teams. For brands built on consumer trust, the damage caused by perceived deception may prove far harder to repair than shrinking profit margins.
About the author
Euan Duncan, partner in MFMac’s media, manufacturing & technology team. He regularly advises on all areas of law relating to intellectual property, technology and media.
