Management Practices
Dishonest Pricing

Big Food considers corporate chicanery to be a legitimate business practice. ... Padding the Bottom Line by Gouging the Customer

Burgess COMMENTARY

Peter Burgess

Big Food considers corporate chicanery to be a legitimate business practice. Padding the Bottom Line by Gouging the Customer

Mothers the world over have told their children a zillion times: “Stop playing with your food!”

I now share their frustration. I’d like to yell at the conglomerate packagers of America’s victuals: “Stop playing with our food!”

Actually, they’re playing with our heads, using dishonest packaging tactics to raise their prices without us noticing it.

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Then there’s the dimple trick. A jar of Hellmann’s mayonnaise, for example, has had its contents shrunk, yet the new jar looks as big as the old one unless you turn it on its end. There you’ll find a big indention in the bottom — a hidden way to shrink the capacity of the jar and give you less for your money. A 16-ounce carton of something quietly slips to 14 ounces. But, shhhh, it doesn’t drop in price.

David Segal, who writes “The Haggler” column in The New York Times, recently reported on his Adventures-in-Kraft-Foods-Land. He talked to a PR lady there about the corporation’s unpublicized (but rather dramatic) change in its Baker’s brand of cooking chocolate.

Instead of an eight-ounce package selling for $3.89, suddenly a box of Baker’s contained only four ounces of chocolate, which sells for $2.89. Wow: that’s nearly a 50 percent price hike per ounce. What gives?

“The change was consumer-driven,” the Kraft Foods spokeswoman craftily replied. “Our consumers have told us that they prefer this [smaller] size.”

Uh, sure, said Segal, but what about that slippery price? She was equally slippery, declaring that the product “is competitively priced.” That wasn’t the question, but her whole game is to avoid giving the honest answer: “We’re gouging our customers.”

Baker’s Chocolate Shrink Rays Package From 8 Ounces To 4, Raises Price At Least 50%
By Laura Northrup May 10, 2013

Julia was baking from scratch with her kids, and she dispatched them to the store to buy a glorious quantity of chocolate. Two boxes of Baker’s unsweetened chocolate. You know, sixteen ounces. The kids came back with two boxes of chocolate, but only eight ounces total. Julia reports that she had paid $3.99 for the eight-ounce bar, and her kids paid $3.38 for each four-ounce bar. That’s a pretty potent blast from the Grocery Shrink Ray.

Was this some kind of special mini-package? Did Julia’s kids mess up? This change is drastic enough that we wrote to Kraft, the company that owns the Baker’s brand, to find out what’s up.

They answered that yes, some of their chocolate lines are now half-sized. The change began in April, and the company claims that the change was “consumer-driven,” because most people don’t use eight ounces of chocolate in one go and then don’t have any use for the other half of the box. A Kraft representative explained:

Our consumers have told us that they prefer this size over the larger size because the majority of our BAKER’S recipes call for 4 ounces or less. The easy break bar makes it faster to melt and easier to break apart. And they can buy only what they need for a recipe, so the product is fresher.

The suggested retail price was lowered to $2.89, so if you have the name of the retailer in question, we’d be happy to follow up and make sure they have the correct information. The new sized BAKER’S bars were available in mid-April and likely just appearing on shelf across the country.

Yes, the price for one box was “lowered,” but the price per ounce is now higher. Prices vary, but based on what Julia paid at a pricey market, she would have gone from paying 50 cents per ounce to 72 cents per ounce if her local store had priced the bar correctly.

To their credit, Kraft did ask for the name and location of the store that charged 50 cents more for the four-ounce bar, but the fact remains that it’s a 4-ounce bar and this is a 50% price hike.

It’s not a juge difference when you only bake from scratch once or twice a year, but it’s still a pretty bad Shrink Raying. “I call B.S. and won’t buy it again,” grumbled Julia.