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17 Feb, 2024 14:54

EU plagued by new hidden inflation – MP

European Parliament member Biljana Borzan has urged the legislative body to look into the phenomenon of ‘skimpflation’, which she says began with the Ukraine conflict
EU plagued by new hidden inflation – MP

The quality of goods and services is suffering across the EU due to ‘skimpflation,’ European Parliament member Biljana Borzan from Croatia warned this week.

The term refers to a cost-saving practice of “skimping” on the quality of products or services while keeping prices steady in order to protect margins. Skimpflation can manifest in anything from staff reductions at stores, to replacing high-quality ingredients in products with lower-quality ones, or using cheaper manufacturing methods or equipment.

According to Borzan, EU supermarkets have been plagued by such practices since the start of the Ukraine conflict even as actual inflation readings are “no longer at record-high levels,”

“Since the Russian invasion of Ukraine, higher-quality ingredients have been replaced by lower-quality ones to produce many food products. This measure was initially intended to be temporary, but has persisted to this day. For instance, the shortage of sunflower oil has led to its substitution with palm oil in certain products,” Borzan wrote in an appeal to the European Commission posted on the European Parliament’s official website. She noted that the bloc’s market “has stabilized,” but that some manufacturers continue to use palm oil because it is cheaper.

“It is particularly concerning that certain manufacturers have not informed consumers about the changes in ingredients on the packaging, and the nutritional values no longer correspond to the original data,” she emphasized. She called on the Commission to analyze the practice to determine whether it is “misleading to consumers” and to prepare measures to counter it.

Borzan’s letter has not yet received an official response from the legislative body.

The EU has been hit with a cost-of-living crisis over the past two years, with record levels of inflation squeezing household budgets, while many companies have gone out of business due to soaring costs of raw materials and energy. The bloc narrowly avoided ending 2023 in recession. Many analysts link the troubles with Brussels’ sanctions against Russia, which led to the bloc losing access to the country’s cheap energy resources.

For more stories on economy & finance visit RT's business section

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