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Taller box, less cereal? Calls for more transparency when companies shrink your groceries – CBC News

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Ellyn Newall of Edmonton felt duped after a recent grocery shop. 

She had purchased two boxes of family-sized Honeycomb cereal for the same price. But when she unpacked her shopping bag, she noticed one box was slightly taller — and slimmer  — than the other.

Turns out the shorter box is older packaging, which is being phased out. The taller box is new packaging — but taller doesn’t mean more product.

In fact, when Newall took a closer look, she discovered the new box has 70 grams less cereal — a reduction of almost 12 per cent.

“The first thing you think is, like: ‘How could they do that to us?’ You feel upset. You feel deceived,” she said. 

It’s called shrinkflation and occurs when food producers shrink items but not the price or packaging, making it hard to detect. It has been going on for years. 

But as Canadians struggle with rising grocery prices, there are growing calls for more transparency when companies downsize products. 

Ellyn Newall with two boxes of Honeycomb cereal, on that is 525 grams and one that is 595 grams.
Ellyn Newall of Edmonton said she would not have purchased the new box of Honeycomb cereal, left, if she had known it contains less cereal than the older box, right. (Samuel Martin/CBC)

“Everything seems to be more expensive now. And by simply reducing the size of their products, people maybe feel like they’re being tricked a little bit,” said Sylvie De Bellefeuille, a lawyer with the consumer advocacy group Option Consommateurs. 

U.S.-based Post Consumer Brands, makers of Honeycomb cereal, did not reply to requests for comment. 

The company hasn’t broken any rules. Manufacturers must display the weight or volume on packaged food labels, but they’re not obligated to alert shoppers when they shrink an item.

“If I had noticed this in the store, I absolutely would not have bought this box,” said Newall, referring to the new box with less cereal. 

“I would honestly like to say to the federal government to please, please find some way to regulate this.”

How widespread is it?

Because shrinkflation can be hard to identify, it’s difficult to know precisely how widespread it is and if it’s on the rise. 

CBC News combed grocery stores over the past couple of weeks and found several cases of shrinkflation. 

For example, Mondelēz’s Wheat Thins crackers has shrunk 10 per cent to 180 grams, Kraft Heinz’s Original Kraft Dinner has been reduced 11 per cent to 200 grams, and General Mills’s Betty Crocker SuperMoist Cake Mix has shrunk 13 per cent to 375 grams. 

Despite the reductions, the price and packaging remained the same for each product. 

Two boxes of Betty Crocker Super Moist Cake Mix has. One is 432 grams and the other is 375 grams.
Betty Crocker SuperMoist Cake Mix has shrunk from 432 grams to 375 grams — a 13 per cent reduction. (Sophia Harris/CBC)

General Mills did not reply to requests for comment. 

Kraft Heinz and Mondelēz said they reduced their products to offset higher production costs.

The industry group Food, Health and Consumer Products of Canada (FHCP) echoes that argument. 

“Food manufacturers are challenged by increasing costs,” FHCP spokesperson Anthony Fuchs said in an email. “Rather than simply pass these costs directly on to consumers, they consider alternatives that can include adapting the size of [the product].”

But consumer advocate De Bellefeuille argues shoppers are more likely to notice a price hike than a subtle weight change. 

“With more transparency, at least we would know that we have less for the same [price], so that we can make better informed decisions,” she said.

CBC News data journalist Daniel Blanchette Pelletier has been tracking shrinkflation. Here are some examples. 

Ben and Jerry’s acknowledges shrinkage

To help keep Canadians informed, Toronto-based brand strategist Neal Chauhan makes TikTok videos exposing shrinkflation.

They have garnered millions of views and heated viewer comments. 

“They’re furious. Not at me, but at the fact that this is actually something that’s happening,” he said. 

When CBC News met with Chauhan, he was making a TikTok video about Ben and Jerry’s ice cream, which recently shrunk by 5.4 per cent to 473 millilitres. 

He credits the brand for being upfront about it. On its website, Ben and Jerry’s states it downsized its ice cream to offset higher supply costs. 

“They’re one of the only brands who have ever brought attention to this,” said Chauhan. “I think it’s a great first step.” 

Neal Chauhan sitting at his computer working on a TikTok video.
Toronto-based brand strategist Neal Chauhan makes TikTok videos exposing shrinkflation that have garnered millions of views. (James Dunne/CBC)

Chauhan would like the federal government to mandate that food producers alert shoppers when they shrink a product. 

Brazil already requires that companies note recent weight changes on a product’s label.

Last month, France pledged to take similar action. Instead of waiting for legislation, major French grocer Carrefour has started posting signs in stores, exposing downsized products. 

A sign in French at French supermarket chain Carrefour warning shoppers of products that have been downsized.
This month, French supermarket chain Carrefour started putting labels on its shelves to warn shoppers of products that have been downsized. (Carrefour/Linkedin)

In 2013, Option Consommateurs submitted a report to the federal government advising it to regulate shrinkflation. Recommendations included requiring companies alert customers on food product labels, as is done in Brazil. 

But Fuchs, with industry group FHCP, warns new labelling requirements could have the “unintended impact” of increasing companies’ costs. 

What’s the federal government doing about it?

Facing pressure to combat high grocery prices, the federal government says it’s creating a grocery task force that will, among other responsibilities, investigate shrinkflation

Justin Simard, a spokesperson for Innovation, Science and Economic Development Canada, told CBC News in an email that Ottawa has identified shrinkflation as a practice that hurts consumers.

However, he had no details yet of any type of action plan. 

As for Newall, once she discovered the new boxes of Honeycomb contained less cereal, she took action by buying several older boxes — before they disappeared. 

“I know that once that sells out, I’m no longer going to get [the same] value for my money.”

Tax implications 

Canadians should also be aware that when some food products shrink below a certain amount, they must pay sales tax. 

Although many grocery items are tax-exempt, shoppers must pay tax on snack foods such as muffins, pastries, cereal bars and cookies in packages of less than six and containers of ice cream under 500 millilitres.

Tubs of Ben and Jerry’s and Häagen-Dazs ice cream each recently shrunk from 500 millilitres to 473 millilitres and 450 millilitres respectively. That means Canadians now not only get less per tub, but they’re also hit with sales tax.

Chauhan discovered this when he purchased two tubs of Ben and Jerry’s to make his TikTok video, and was charged 13 per cent harmonized sales tax. 

“We’re getting taxed on this because it’s technically a single serving. Whether the average consumer is OK with that is a different story,” he said.

Despite ever-shrinking products, the Canada Revenue Agency told CBC News it’s not reconsidering its rules for taxable snack foods.

WATCH | How shrinkflation affects shoppers: 

How shrinkflation affects Canadian consumers

1 year ago

Duration 2:06

Featured VideoTo deal with the impact of rising inflation, companies are reducing package sizes while charging the same prices in what’s known as shrinkflation. Experts suggest consumers can avoid shrinkflation by paying attention to the price per unit rather than the total price.

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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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