Russian egg producers responded to high food prices by selling one fewer egg per carton. Let the memes begin!
On January 8, a photograph of a carton with nine eggs was published on the Russian social portal Pikabu. Russian eggs are usually sold in groups of 10; selling nine eggs at a time would be like selling a carton of 11 in the United States. The photo’s title deadpanned, “A nine of eggs, please.”
In the caption, the author listed several more products that come in strange volumes: “Milk 867 milliliters, mayonnaise 220 milliliters, Coca-Cola not one liter but only 900 milliliters. Now in the New Year it’s the eggs’ turn.” Many have linked the appearance of the nine-egg cartons to rising food prices.
Fact-checking the meme
The creator of the meme correctly captured the essence of the economic phenomenon that has given rise to the nine-egg carton. The producer of this non-standard packaging, the Varaksino factory in Udmurtia, calls the innovation a “marketing stunt for the New Year.” However, from an economic point of view, this is evidence of “shrinkflation.”
What is this? Where did this practice come from?
Shrinkflation is a term for the tricks producers use when they don’t want to raise prices directly (which consumers usually notice quite easily) but instead reduce the quantity of a standard portion.
In Great Britain, Ireland, and the United States, this form of hidden inflation has become commonplace over the past five years. In Great Britain, 2,500 goods have been identified as shrinkflated since 2012. The biggest chocolate producers in the West have engaged in shrink wars – for example, Toblerone increased the distance between each chocolate triangle in its candy bars sold in England.
Economists believe that widespread shrinkflation makes it harder to measure inflation accurately.
Eggs were the most expensive produce item in Russia last December. They go up in price before each New Year – demand goes through the roof as Russians rush to make a million bowls of salat Olivier (a classic Russian salad made with potatoes, boiled eggs, chicken or ham, and mayonnaise). But in 2017, for example, egg prices rose in December by six percent, while in December 2018, they rose by 15.4 percent (plus a third since the beginning of the year.) As a result, nine eggs today cost more than ten eggs just a month ago.
Olivier isn’t the only factor. Feed prices for poultry have been rising since the spring of 2018; in the fall, fuel producers, who were forbidden from raising prices at gas stations, decided to take it out on entrepreneurs and cancelled gasoline discounts for them; at the same time, several large poultry farms closed because of the avian flu epidemic. But all these problems for producers wouldn’t be so fearsome if they hadn’t just survived an entire year of falling prices for their produce. In 2017, many factories overproduced, sold the eggs at cost, and then started to slow production. Finally, in the fall and winter of 2018, they did a 180 and returned to the production levels of two years ago. According to data from Rosstat, ten eggs today (Rosstat doesn’t know how to count by nines) cost just a bit more than they did in January of 2017.
Translation by Sharon Lurye