Friday 19 January 2018

Blame the government, not Brexit, for the biscuit rip off

McVitie's are reducing their packets of Digestive biscuits from 500g to 400g. This means consumers will be getting seven fewer biscuits in their pack. Parts of the media have been blaming Brexit for this and the company itself has pointed the finger at the weaker pound and rising cost of raw materials.

McVitie's is shrinking the size of a packet of Digestives because of price increases caused by the Brexit drop in the pound, it claims.

The company said the value of sterling has made ingredients more expensive and it did not want to damage the quality of the biscuits.

If these were the real reasons, the obvious thing to do would be to raise the price. If companies made their products smaller every time inflation rose, everything would be tiny.

But they are not the real reasons. When the ONS looked at the 'shrinkflation' of chocolate and confectionery last year, it found no evidence that the value of sterling or the price of raw materials were responsible:

Manufacturers’ costs may also be rising because of the recent fall in the value of the pound – leading some commentators to attribute shrinkflation to the UK’s decision to leave the European Union. But our analysis doesn’t show a noticeable change following the referendum that would point towards a Brexit effect. Furthermore, others (including Which?) had been observing these shrinking pack sizes long before the EU referendum, and several manufacturers have denied that this is a major factor.

The real blame lies with Public Health England and its sugar reduction scheme. PHE have set the food industry the target of reducing sugar in its products by 20 per cent by 2020. McVitie's said last year that it was 'confident' it could achieve this.

But how? Artificial sweeteners do not work well in biscuits. When PHE realised that genuine product reformulation was impractical, they told the companies that reducing portion size would count as sugar reduction. Indeed, they actively encourage them to reduce portion size.

Shrinking a pack of biscuits from 500g to 400g is a reduction of twenty per cent and so McVitie's can claim to have met its target. Last year it reduced the number of Jaffa Cakes in a packet from 12 to 10, which is nearly a twenty per cent reduction. There will be more to come.

The price of the new, smaller pack of Digestives is also going to be reduced, but not by as much. It will fall from £1.25 to £1.15, a drop of 8 per cent. The result is that Public Health England can say that their target has been met, McVitie's can make a bit more money and the consumer loses out. Meanwhile, people who don't want to leave the EU can brandish this as further evidence that Brexit is making us all poorer.

But it is fake news. It has nothing to do with Brexit. It is all about the government's ridiculous childhood obesity strategy. They call it 'health by stealth'. Doing it by stealth is bad enough, but denying that it is happening while lying about the reasons behind this rip-off is intolerable.

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