Why small might not be beautiful

The Good Life Letter 

19th January 2018

  • Find out how the laws of economics can be altered
  • Is this the act of a responsible company?
  • Why no government should allow this to happen
I thought that I understood economics and commerce after spending most of my life before the Good Life Letter involved in it to one extent or another.

For many years I had the concept in my mind that you made a product in a standard sized pack which you charged a premium for, then made it available in a multipack or a larger pack which offered a volume discount.

Then you might choose to offer your product in a smaller pack for a small discount, but arguing that the smaller pack made it easier to carry with you.

This works for products as diverse as potatoes where I can buy a 2.5kg pack for around £2.00 which will sort us out for a couple of meals, or a 20kg bag for £9.00 which will last us for a fortnight. Alternatively, I can have a ‘grab bag’ of a single serving of potatoes for £1.50.

The mathematics works.

I can do the same with vodka where a 70cl bottle is £15.00, a full one litre is £19.00 or a smaller 35cl bottle is £9.00.

I could repeat these examples with other and more varied produts but I think you get the idea; bigger packs for a big discount and smaller ones for a small discount.

This is retail logic 101, the very basics.

Very few product manufacturers would ever get away with making something smaller but charging more money for it – unless you are in the confectionary trade.

You see these purveyors of high sugar delight have a track record of making smaller versions of what we have grown to love and then stinging us in the process.

I remember when me and my brother were kids we could happily share a Mars bar, and that allowed for Mum stealing a crafty piece too.

Wagon Wheels were the size of a car tyre and could not be eaten in a single sitting, the same was true of Jammy Dodgers that I used to buy from the school tuck shop.

I am not pretending that these were in any way healthy options or that their purchase represented money well spent – it was just a fact that they were all much bigger back then than they are now.

For the last two decades these sticky treats have been slowly reducing in size – since 1990 Mars bars are 28% smaller, Wagon Wheels 12% and Twix 17%.

But the thing is that they have shot up in price despite being shrunk.

Any excuse will do

Every time one of the major brands gets a makeover it gets smaller and the price takes a lift at the same time.
The manufacturers tell us that the increase in cost of raw cocoa, the soaring cost of transport or the hikes in manufacturing cost are the reason for the new price and that they are trying to ensure that the buyers still get value for money by remaining faithful to the original recipe but that means smaller bars.

After an initial grumble the great British public go back to buying the product in the quantities they did before and the money keeps rolling in for the companies.

But just this week saw another excuse for this phenomenon being aired by Coca-Cola – apparently they will now be reducing the size of all their bottles and putting the price up significantly...

...because of the sugar tax!

Really! The fact that high sugar drinks like original recipe Coke is going to incur a tax means that the company can recoup this from the consumer and double their profits by making the bottles smaller.

Less product for a higher price... that’s not what the government was expecting as a result of their attempt to reduce the sugar in diet was it?

Mind you, they will be pocketing the extra tax money so I suppose they could argue that it has all worked out rather nicely, until you realise who is footing the bill.

For many decades Coca-Cola has ensured that generations have become hooked on their drink, spending billions of pounds in advertising and sponsorship to re-enforce buyers’ decisions that they ‘need’ a Coke.

The high sugar content of this beverage makes sure that drinkers become hooked and crave more and now they are going to pay for the privilege.

When a few grams make all the difference

The Sugar Tax comes into force in April and sees any drink with more than 8g of sugar per 100ml liable for a tax of 24p per litre – Coke Original has 10.6g and a spokesman for the company said they would not be changing this because:

"People love the taste... and have told us not to change," adding, "We have no plans to change the recipe of Coca-Cola Classic so it will be impacted by the government's soft drinks tax."

So, they are prepared to thumb their noses against the spirit of the Sugar Tax, make their loyal customers pay the price and happily play their part in destroying a nation’s health. Meanwhile those who should be responsible for forcing them to lower their sugar content will be taking an estimated £520m in extra taxes.

Even if they do spend this on sport in schools it really isn’t what is needed from the introduction of the Sugar Bill.
Every single expert in the world of dietetics and nutrition has highlighted the danger that sugar plays in diet, especially for children, and the call was for legislation to come into play that would reduce the sugar levels.

If evidence is needed for this look no further than the latest statistics from the NHS which showed that in 2017 an average of 170 children per day had teeth extracted in hospital due to excess decay – decay due to sugar.

Let me just re-emphasis that number: 170 children PER DAY!

Or to put this another way, over 40,000 children at a cost of £36m; whichever of those facts bothers you most you have to agree that this is not acceptable.

Seeing how the first of the big companies has shown their arrogance and disregard for this just proves my opinion that they are nothing short of disgraceful.

Yours, as always


Ray
P.S. Don’t forget that there is a very good alternative to white sugar available that can be used just like sugar, even for baking – click here to find out more


 

 


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