Turkey suffering from “shrinkflation” as food costs rise
Turkey is suffering from a phenomenon known as “shrinkflation” after the cost of food surged, according to Atilla Yeşilada, an analyst and founder of Global Source Partners in Istanbul.
Companies are selling food in reduced portions instead of raising prices due to pressure from the government on retailers and wholesalers to rein in inflation, Yeşilada told Voice of America.
“Shrinkflation has started, which is instead of rising prices, companies selling in smaller formats,” Yeşilada said.
Food prices jumped more than 30 percent annually in January, helping to push overall inflation up to 20.4 percent and prompting the government to intensify a crackdown on what it calls “food terrorists” who are supposedly increasing prices unfairly.
The authorities have since opened food banks in major cities selling cheap, rationed produce and intensified scrutiny of companies’ pricing policies. Many supermarkets have reduced the price of key products but limited the amount people can buy.
“So a 100-gram chocolate bar is now being sold for the same price, but it's only 80 grams and it's the same for toothpaste, etc.,” Yeşilada said. “The plates are getting smaller in cheap restaurants, as people can't afford full portions.”
Economist Cengiz Aktar warned the government that its approach to the problem of rising food costs could have unforeseen consequences.
"This has nothing to do with economics,” Aktar told VOA. “Turkey will dearly pay for these mistakes because these are gross economic mistakes. There will be huge price increases. People will have difficulties to buy food and the public finances will collapse one day.”