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The Stealth Price Hike at the SupermarketAired January 3, 2001 - 2:41 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
NATALIE ALLEN, CNN ANCHOR: Well, as we've been talking about, energy and production costs are now rising. And that's after several years of inflation held them in check. And, normally, such increases would be passed on to us, the consumers, in higher prices. But because we're all so used to paying lower prices, manufacturers are passing costs along in a way many of us have not even noticed.
Here is CNN's Frank Buckley.
FRANK BUCKLEY, CNN CORRESPONDENT (voice-over): You might notice how much you pay for each item you buy at the supermarket. But when was the last time you looked at exactly how much you're getting for that price? That bag of Tostitos, for example: $3.29, as it has been for years. But look at the weight: 13.5 ounces. The bag used to contain a full ounce more.
(on camera): Have you noticed that?
UNIDENTIFIED FEMALE: No, but it makes me very angry.
UNIDENTIFIED FEMALE: Well, you're paying the same price, but getting less for your money.
BUCKLEY (voice-over): Or put another way: The company is receiving more money for the same product.
(on camera): The food industry has a term for the practice. It's called the "weight-out." This is how it works: A manufacture takes weight out of a product already being sold to consumers and continues to sell it at the same price.
(voice-over): Frito-Lay, for one, says it's no secret. The bags are clearly marked: "Due to rising costs for energy, production and distribution, and rather than raising prices, Frito-Lay has slightly reduced some package sizes by once ounce or less."
And potato chips are not the only products being downsized. Pampers are, too. Procter & Gamble cut back the number of diapers in its packages by 13 percent, dropping prices by only 7 percent: the company also citing increased production costs. But Jordana Shore (ph) says, with the cost of her new production, the last thing she needs is less diaper per dollar.
JORDANA SHORE, MOTHER: As a mother, you know, we want to save as much money as we can. I would rather spend the money on the child than on the Pampers.
BUCKLEY: Analysts say larger and more powerful retailers like Wal-Mart, who market lower prices, and the consumers themselves, who have become accustomed to certain prices during the past few years, contribute to the downsized products. But consumer advocates say, while the companies are not breaking the law, they may be tarnishing their brands.
CAROL TUCKER FOREMAN, CONSUMER FEDERATION ASSN.: If deceptiveness breaks faith with the consumer, they may lose that customer. It may be the most expensive ounce of potato chips that Lays didn't sell.
BUCKLEY: Frank Buckley, CNN, New York.
LOU WATERS, CNN ANCHOR: You learn something new every day, don't you?
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