German court finds against Mondelēz in Milka bar ‘shrinkflation’ case

The result of a European court case in Germany has found Mondelēz’s Milka brand has broken consumer competition law in not informing shoppers about a reduction in size of bars, writes Neill Barston.

As Confectionery Production has covered significantly in recent years, the wider sector has been impacted by the results of increased instances of ‘Shrinkflation’ in which product ranges are reduced with either no price alteration, or in many instances, continually raised in price.

Moreover, such cases have become especially widespread in the past couple of years in light of the fact cocoa prices have experienced high levels of volatility, with prices reaching peaks of $12,000 a tonne on futures markets at the start of last year, while plunging to around $3,000 several months ago.

This has led many manufacturers to take action in reducing sizes of core ranges – as with the latest issue with the key Alpine Milka bar, which was reportedly cut down from 100g to 90g, without the business communicating adequately that this had happened.

According to the BBC, the three-week court case, which was brought by the Hamburg consumer protection office, saw the court in Bremen rule earlier this week that shoppers had in fact been misled in there being insufficient mention of the bars being smaller, with prices moving up from €1.49 to €1.99 per bar, with allegedly no alteration to wrapping or mention on packs that the range was reduced in size.

Mondelez, which is behind other major brands including Cadbury, had argued in the case that it did in fact mention the situation on its website and social media, that with higher cocoa prices, it had adjusted weight of Milka bar ranges. It had reportedly contended in the case that its weight policy of product ranges had sometimes naturally varied between 80-100g – an argument that was rejected by the court.

Consequently, in light of the ruling against it, the business is said to be “taking the decision of the court seriously,” in how it would respond for future developments within the wider company. It is understood that the Swiss-headquartered firm has a month to appeal against the verdict.