Inflation: earn more or charge more?

Money Matters

29 May 2010 | 1 Comment

I was at the market this morning, buying some fresh produce for the week ahead, and couldn’t miss how costly things have become lately.

But more importantly, how producers have decreased sizes and portions while charging as much or maybe more.

Like a pack of 7 pieces of bean-curd (tauhu) were priced at RM2. But they have shrunken in size. I remember those days, like about 2 years ago, you get a good 3″ by 3″ piece. But now, it’s a mere 2″ by 2.5″. So, producers are cutting the size to maintain the perception of prices.

I remember, sometime in 1999, I was doing grocery shopping with my mom, and we were buying powdered milk. I noticed back then, the biggest food manufacturer in the world, Nestle, playing with sizes while maintaining the prices. For example, a 1kg soft-pack of Nespray milk powder would cost about RM10.50. Then, the pack was unsuspectingly changed to a 900gms soft-pack at RM10.50. But at a glance, the size would appear the same to the eyes of the consumer who would simply pick out the stuff into their trolleys. Believe me, as the years passed, the packages reduced further in weight, like 800gms. Prices didn’t only stay the same, it also went up.

Nowadays, soap manufacturers are doing the same. A soft-pack of Fab Multi-coloured laundry detergent was sold in 3kg packages, but now, has been scaled down to 2.4kg packs, however, the price of the previous 3kg pack was maintained.

I am a user of the Amway’s Glister toothpaste for the past 16 years, and wouldn’t brush my teeth with any other paste unless was caught short while traveling, etc. A standard toothpaste tube was 230ml and was priced at RM16 (distributor’s cost), and in the past 2 years or so, I noticed that the tube size is now cleverly reduced to 200ml at the same cost. But at a glance, no one would notice the difference. Or, has the price increased to RM18? Amway… so much for compassionate capitalism! Maybe the son needs to re-read the good book his dad had written more than a decade ago.

So, manufacturers, big or small, are playing this game now: maintain the perception that prices are the same, ie, no increment in prices of essential goods, but adjust cleverly, the net weight of the product. And if the big names such as Nestle, Amway, Unilever, among others are playing this game, then I suppose the local bean-curd (tauhu) manufacturer can be forgiven, yes?

Hey look, be a man: just charge more accordingly if indeed costs have increased. But trying to fool the masses by playing with sizes, weights, portions is bad-ass, huh?

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One Response on “Inflation: earn more or charge more?”

  1. Alfred Lim says:

    Don’t you aware that the A4 papers that we used daily in the office is now packed on 450pcs per ream compare to the original 500pcs per ream years ago. Same goes with those refillable inks.

    But hey, my web/email hosting plan storage space used to be selling at RM790/year for 20MB in 2002-2003 is now 7 years after selling at only RM300/year for 3,000MB storage space!!

    I could have been rich if I am able to sell like those fellas in the consumer markets!

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