3 ms·
> Is it more egregious if price rises from 90 cents for a 100g ketchup bottle to 90 cents per 90g bottle, instead of 1 dollar per 100g bottle? No. The issue i
by pwg 3y ago
> Is it more egregious if price rises from 90 cents for a 100g ketchup bottle to 90 cents per 90g bottle, instead of 1 dollar per 100g bottle?
No. The issue is that consumers tend to remember the price they last paid for a product, but seldom remember the weight/volume of the same. A producer can raise the price for a product in two ways: 1) directly increase the price for the same weight/volume of product, or 2) reduce the weight/volume of the product while maintaining the same price.
If the company performs #1, a majority of consumers notice, and the company often sees reduced sales (thereby negating the extra profit from the increased price).
If the company performs #2, a majority of consumers will not notice the weight/volume change. Esp. if the outer package is the same size as the prior version, and all that changes is the small "weight/volume" listed on the label. In this instance, most consumers do not realize the price actually increased, and so continue to purchase the same amount as before, but now the company captures greater profit due to the "stealth price increase".
Over time, more and more companies have learned this consumer physiology and are often attempting to hide price increases behind weight/volume reductions. Laws like this are simply an attempt to prevent this stealth price increase and instead make it clear that if the company wants to raise the price of the product, then the price of the product should be what increases. Whether any regulations that result from this statute (should it get enacted) produce that outcome is yet to be determined.