Democrats Accuse Food Companies of Price Gouging

Democrats in Congress are looking into certain cereal, beverage, and snack manufacturers and whether they have been shrinking package sizes while keeping prices the same, a practice known as "shrinkflation."

In joint letters to the CEOs of Coca-Cola, PepsiCo and General Mills, Sen. Elizabeth Warren, D-Mass., and Rep. Madeleine Dean, D-Pa., accused the companies of "price gouging Americans" as they face "challenging economic circumstances." They noted specific examples, such as the "Family Size" Cocoa Puffs cereal changing from 19.3 ounces to 18.1 ounces, as well as Gatorade replacing its 32-ounce bottle with a 28-ounce version even though the price remained the same.

According to a McKinsey report, large brands such as these are under pressure from different factors, such as slowing population growth, more digital competition, and inflation. McKinsey notes that price increases and "shrinkflation" have caused consumers to spend 10% more on groceries but get 4% fewer items.

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