"Shrinkflation" refers to the reduction of the volume or quantity of an already existing product on the market while maintaining the same packaging size, without the price of the product being correspondingly reduced. This leads to an increase in the price per unit. Consequently, the phenomenon of "Shrinkflation" is inherently deceptive to consumers. The Austrian government therefore proposes an "Anti-Cheating Packaging Act" ("Anti-Mogelpackungs-Gesetz")

What it means, if the government proposal is accepted without changes, is illustrated in the following Q&A:

1. What is the Anti-Cheating Packaging Act and when is it supposed to come into effect?

The Anti-Cheating Packaging Act is intended to combat the phenomenon of so-called "Shrinkflation" – that is, the reduction of the volume or quantity of a product while maintaining the same packaging size without corresponding price reduction.

The law is set to come into effect on April 1, 2026, and will expire in mid-2030.

2. Who is the Anti-Cheating Packaging Act applicable to?

The law applies to businesses in the food and drug retail sectors that offer goods for sale to consumers. The drug retail sector includes drugstores and drug markets that offer items such as soap, bath additives, perfumes, deodorants, washing, cleaning, and care products.

Business locations with a sales area of a maximum of 400 m² are exempt from the obligations, unless these business locations are part of a company with more than five shops.

3. Which goods must be labeled?

Goods must be labeled if the following conditions are met:

• The quantity has been reduced while the packaging size appears unchanged.

• This leads to an increase in the price per unit.

• For the goods, there is an obligation to display the base price according to § 10a and 10c of the Price Indication Act.

• The goods are offered pre-packaged.

The obligation to label should also apply to goods that consist of multiple pieces and where the offered number of pieces is reduced, if this leads to an increase in the price per piece.

Such products should not be subject to the labeling obligation that naturally undergo fluctuations or have varying amounts, such as salad or apples.

4. When is labeling not required?

Labeling is not required in the following cases:

• The price per unit has increased by less than three percent.

• A label indicating the fact of the reduction in quantity is already clearly visible and legible on the packaging.

• The goods are offered for sale under distance selling contracts and contracts concluded outside of business premises.

5. Does the labeling obligation also apply in case of changes in formulation?

To prevent circumvention of the labeling obligation, the labeling obligation also applies when, in addition to a reduction in quantity, the goods are offered for sale with a modified formulation, if the current appearance is likely to give the average consumer the impression that it is still the goods offered before the quantity reduction.

However, if the average consumer perceives the goods as changed, labeling is not required (no continuity expectations).

6. How long must the labeling take place?

The labeling must take place for a period of 60 days from the date of the initial offering of the goods in their reduced quantity at the respective shop.

7. How must the labeling be carried out?

The type of labeling depends on the size of the business:

• Businesses with more than five shops:
  The labeling must be done on the product or on the shelf or in the immediate vicinity.

• Businesses with a maximum of five shops:
  In establishments with more than 400 m² of sales area, a clearly visible and legible information sign at least the size of DIN A1 must be placed in the entrance area.

The labeling must contain easily understandable information about the fact of the reduction in quantity – such as the notice "Caution – Less content – higher price".

8. What sanctions are in store for violations?

The new law provides for correction orders and in case of non-compliance for fines of up to 2,500 euros per product (not per single item/piece), but no more than 10,000 euros in total (in case of repeated violations up to 3,750 euros per product, but no more than 15,000 euros in total).

No prosecution will occur if the entrepreneur can prove that they were not informed of a reduction in quantity by the manufacturer or importer. The transmission of the EAN/GTIN by the manufacturer or importer is considered such information.

In addition, a violation of the Anti-Cheating Packaging Act may also be addressed as a legal violation under § 1 UWG (Unfair Competition Act) or misleading under § 2 UWG by competitors.

If you need advice on the topic of shrinkflation or other areas of advertising law, ZEMANN IP looks forward to your message.

This contribution is merely a general information and does not constitute legal advice. ZEMANN IP assumes no responsibility for the currentness, correctness, and completeness of the information, and particularly excludes liability for any direct or indirect damages, claims for damages, consequential damages of any kind that may arise from the use of the provided information.