Smaller packages, worse packages: Brazilians complain about ‘reduction’

Complaints about reduced packaging and worsening of the quality of products and services without prior communication to customers, in addition to misleading advertising, are growing in Brazil, at a time when inflation and high interest rates have put pressure on consumers’ budgets and companies’ costs. .

A survey by the Reclame Aqui institute with 6,665 users, carried out for Reuters in May, pointed out that about 80% of consumers in the country have noticed the movement of manufacturers to reduce the size, weight or size of packaging and products, a movement that until now nicknamed “reduction”.

Accusations of attempted deception have grown since the second half of 2021, said the president of the Reclame Aqui institute, Edu Neves, and range from aesthetic products to worsening in continued service packages, such as TV and internet.

“Consumers complain that they are being treated like idiots,” said Neves.

The period coincides with a recent spike in inflation on the back of sharp rises in input prices, as companies jostle for space in consumers’ tight pockets and face pressure to defend profit margins. This environment has been widely cited by companies listed on the stock exchange, many of them suffering a sharp drop in their share price.

Among the measures cited by listed companies to achieve this adjustment in the accounts are reduction of subsidies and discounts, increase in prices and interest rates, in addition to reducing terms for purchases in installments.

Overall, companies managed to reverse a downward trend in margins that had been under pressure in recent quarters, partly also supported by the end of social isolation measures. According to data from Economatica, the average net profit margin of 324 companies listed on the B3 in the first quarter was 0.9 percentage point higher than a year earlier, at 6.85%.

According to XP equity strategist Jennie Li, while cost cutting is a way for companies to show investors that they are capable of reacting to hostile environments like the current one, the market is watching for indications that they may return to increase revenues in the coming quarters.

“For the investor, the most important thing is balance,” he said.

ACTION AND REACTION

But for the executive director of Procon-SP, Guilherme Farid, in addition to the more immediate need to balance finances, companies should also be careful not to be perceived as silently trying to deceive customers, which can damage their image. more lasting on your brands.

“If you don’t notify the consumer in advance that it is, for example, reducing the size of the package, which is required by law, the company is perceived as acting in bad faith,” said Farid.

According to Senacon (National Consumer Secretariat), in the first four months of 2022 the number of complaints for misleading advertising grew 19.2% compared to the same stage last year. The leading sectors in complaints were e-commerce, telecom operators, airlines, banks, card operators and loyalty programs.

In retail, a notable recent case was McPicanha, a McDonald’s sandwich that the chain even excluded from the menu after it became public that the product only tasted like the meat that gives it its name. Rival Burger King was forced to change the name of Whopper Ribs to Whopper Paleta Porcine.

Both networks are being investigated by Procon-SP. If convicted, they could face a fine of R$12 million each.

In a statement, Arcos Dorados, which operates the McDonald’s brand in Latin America, said that it respects customers and consumer protection institutions and “provided all the clarifications requested.”

Burger King said that “after hearing, understanding and understanding the reaction of consumers”, it changed the name of the snack to Whopper Pork Palette, with the new name and with the same composition used since its launch.

Conar (National Council for Advertising Self-Regulation) did not cite figures for 2022, but said there had been an increase in claims of false advertising, attributing the increase not only to the economic crisis.

“There is a greater demand from consumers in times of crisis,” said Juliana Albuquerque, director of the agency.

DIGITAL ACTIVISM

Cases perceived as attempted deception have not only fed the complaint databases of consumer protection agencies but also been the target of campaigns on social networks, especially after the e-commerce boom during the pandemic. According to Procon-SP, complaints related to online shopping soared 536% in the last two years.

“Brazilian consumers are much more engaged with the use of social networks,” said Camila Costa, president of advertising agency iDTBWA.

According to her, the attention of clients on the brands has grown recently, since several of them have tried to link their names to good social, environmental and good governance practices. “With that, they are more exposed,” she said.

But if, on the one hand, the convenience of digital channels has empowered consumers, on the other hand, e-commerce has created new challenges for the control of ad delivery patterns, since many of them have started to be done online.

“There is a very large creative license, including the participation of influencers in social networks, which are not part of the more traditional channels of advertising and make regulation and self-regulation difficult,” said Albuquerque, from Conar.