Two Democratic members of Congress sent a letter to some of the nation's largest food and beverage companies, saying their companies are “compromising their profits” through “shrinkflation” (reducing the size of products while keeping prices the same or raising them) and “tax evasion.” “They are profiteering,” he said.
Sen. Elizabeth Warren (D-Mass.) and Rep. Madeline Dean (D-Pa.) sent letters to the CEOs of Coca-Cola, PepsiCo, and General Mills, demanding that their companies engage in this practice. I demanded that it stop.
The letter was sent to executives on Sunday and was first reported NBC News.
“Shrinking the size of a product to jack up the price per ounce on consumers is not innovation, it's exploitation,” the Democratic Party said. wrote in their letter. “Unfortunately, this price gouging is a widespread problem, with corporate profits driving more than half of inflation.”
Lawmakers said that from 2018 to 2022, Coca-Cola made $13.4 billion in profits but paid an average effective tax rate of 13.5%, PepsiCo made $22.4 billion in profits and paid a 15% tax rate. He pointed to a recent report from the Institute on Taxation and Economic Policy that found that while corporations earned $13.4 billion in profits from 2018 to 2022, they paid an average effective tax rate. Mr. Mills earned $12 billion but paid 14.8%.
“No company should pay a lower tax rate than working Americans, especially when those same companies turn around and gouge consumers through shrinkflation,” the lawmakers said.
Lawmakers said in a joint statement that General Mills Co. will reduce the size of Cocoa Puffs family-sized boxes from 19.3 ounces to 18.1 ounces, while keeping prices the same, and PepsiCo will reduce the size of its 32-ounce Gatorade bottles to 28-ounce bottles. He said he had replaced it and revised the fees. Same price.
Coca-Cola has “publicly told shareholders” that its market power has “earned the right” to raise prices, the release states.
The Hill has reached out to both companies for comment.
