As the cost-of-living crisis continues, terms like “drinkflation” and “shrinkflation” have become increasingly popular when referring to the value of the items we purchase.
Major drink brands – including Carlsberg, Stella Artois and Hophead – have been accused of drinkflation over the past few years, while household items such as sausages and mouthwash have fallen victim to shrinkflation. But what do the terms mean, and how do they impact the value of the product we buy?
What is drinkflation?
The term refers to a cost-cutting technique by brewers, where the strength of beer is reduced but prices for customers are kept the same. Last year, a lower rate of tax on alcohol under 3.5 per cent ABV was announced, with popular beer brands like Carlsberg, Foster’s, Old Speckled Hen, Hophead and Stella Artois soon lowering their beer’s ABV percentage to reduce the rate of tax they have to pay.
“Events of the past few years have significantly increased costs for all brewers, from the price of energy needed for the brewing process, through to the price of malt, as well as the glass, cardboard and aluminium we need for our packaging,” a spokesperson for pub chain and brewing company Greene King told Just Drinks last year. “Reducing the ABV is one way we can do this, as it lowers the duty we pay without noticeably affecting the beer’s flavour, and helps offset some of the rising cost of brewing our beers.”
However, the wholesale price that pub owners are charged for a cask has remained the same, meaning they are unable to charge their customers a lower price in tandem with the ABV percentage reduction.
What is shrinkflation?
Shrinkflation is another term born out of the cost-of-living crisis’s impact on food and drink and refers to when the size or volume of the products we buy reduces, but the price remains the same. Earlier this year, Which? found that the size of household items including mouthwash, teabags and gravy granules had been subtly reduced by manufacturers – with 77 per cent of shoppers noticing shrinkflation in supermarkets.
Skimpflation, on the other hand, describes when companies “skimp” on the quality of the product or service they provide while keeping (or increasing) the price.
