It has been widely reported that certain American food manufacturers have turned to downsizing package sizes on the quiet in a bid to cut costs, fuelled by rising production costs due to soaring oil and food prices (what’s new).

Of course, the hush-hush game is being played so as not to repulse consumers who may not be observant enough to notice the downsizing at all. After all, in a world where prices of everything else is going up, it will be a promotion of the items of some sorts should their prices remain stagnant. Such coy marketing ploys at work, albeit underhand. Who cares about honesty being the best policy if profiteering is affected at the end of the day?

Though, with the latest reports, these ploys are likely to have been foiled and the companies have some answering to do to their customers.

Then again, are consumers that blind not to notice the surreptitious marginalising privately at play?

As Ms Deirdre Cummings, legislative director at consumer advocacy group MASSPIRG aptly puts, “So many times, they put ‘new improved package’ on the label but they would never put ‘new, improved and smaller’.”

Shouldn’t it be made clear for consumers that they are paying less for the same amount? As buyers, we definitely have the right to know about such changes. Well, at least the Singapore market is not that badly affected yet, although even if it is, we can probably trust our Consumers Association (CASE) to set things straight.

In the meantime, however, has any other fellow local readers noticed a possible covert shift taking place in the fast food restaurants here, in terms of the food portions? I was having supper with a friend recently when he commented, rather aptly it seems, that “unlike 10 years ago when the Big Mac was so huge that we have to split the hamburger into two layers to eat it, the Big Mac is more like a Small Mac now”. Apart from which, the sizes of the burgers at McDonald’s, the fried chicken at KFC, as well as the meat at Long John Silver’s certainly seem to be shrinking by the year, while the prices of their meals are still going up.

As consumers become savvier while the business world gets tougher, it remains to be seen who will have the last laugh.

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Unless you have been living in a hole or are one of those ‘financially-free’ people who do not really give two hoots about all this, it should not be news that the rising inflation rates are threatening to engulf Singaporeans (especially the middle-income and low-income groups; what, you thought there wasn’t any income ‘hierachy’ around?). Or rather, have already overwhelmed Singaporeans.However, for the benefit of said clueless people, here’s a rehashing of the statistics which have virtually been appearing in the papers daily:Singapore’s inflation rates grew 2.9% last year as compared to 2006, and are set to grow further this year.
(How’s that for a new year gift.)

Though there’s a positive side in all this inflation nonsense in that angpow rates have been inflated as well, as reported by mypaper a few days ago. While it was $2 a few years back, the market rate is $4 currently for the minimal angpow amount you may packet without having to be seen as indecently cheapskate by said angpow receiver and his parents. (Good news for all unmarried people!)

However, by inflation here, it means MARKET inflation, which may not necessarily be such a good thing after all.  Though I realise that newspapers here love to make a lot of comparisons with the inflation rates in other countries to essentially soften the impact (and that is where the scary close-to-10%-inflation-rates-in-Dubai comes in.. While global economics are intrinsically linked, face it, nobody really cares how much more people in Dubai have to pay for an egg). However, this impact certainly hasn’t been reduced much when people have been making radical changes to their lives!

It all seems to be a chain reaction to me. The companies, organisations and what not get affected by all the rising food costs, fuel costs, and what not, and the people subsequently get affected. When this happens, the people will get buay song and blame said companies for not paying attention to their needs and threaten not to patronise the services of these companies again. But at the end of the day they’ll somehow mince their words and go running back to these companies because it has formed part of their lives. Which in turn gives them more reason to up prices in future because they know they have a stable customer base to fall back on!

Let’s take a look at the good news:

– 75% of 1,271 hawkers here have yet to raise their food prices (though I realise the key word here is ‘yet’)

– Supermarkets such as Giant, Carrefour, NTUC and Sheng Siong are producing their own house brands which mean cheaper goods becos they can do away with all the intermediary shipping costs and all that.Let’s take a look at the flipside:- Higher fuel prices mean higher transportation fees (PS: I find that guy who deliberately bought oil at $100 a barrel and sold them off at $99.40 later just for bragging rights selfishly lame. Just for his grandchildren he sent the entire global market into panic.)
– More ERP gantries mean higher transportation fees
– Higher ERP rates mean higher transportation fees (Gosh, sooner or later it’ll probably offset the public transport-personal transport balance so much that it’d cost $10 to drive into town!)
– Higher costs of food products (oil, eggs)
– Higher taxi fares (which is another interesting issue to be looked at in a later post)
– More expensive flats
– Higher movie ticket prices, albeit only for Cathay cinemas (though it won’t be soon before long that the other movie players join in the fun), by $0.50 for normal movies and $1.00 for blockbusters. I have to say that they’re quite smart; trying to fleece more out of sure box office hits such as “Kungfu Dunk” than arthouse draws such as “The Diving Bell and the Butterfly”.
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And all this coincidentally comes on the back of the GST hike last year. I know, I know, nobody really wants the US economy to falter into recession considering how it’s the biggest stock market in the world, and the timing isn’t that great. But let’s face it, if the GST had not been raised by that 2% the pinch will not be that hurtful.Seems like what has been painted isn’t exactly a scenic transquil picture with nice flowing rivers and beautiful trees, is it?Well, it would be, if something actually deflates for once on a long-term basis, not one of those one-off promotional discounts!

*Written by aR