SEOUL -- South Korea's antitrust regulator said on Friday food makers and suppliers will be required to notify shoppers if they reduce the size of their products or face fines of up to 10 million won ($7,300).

The Fair Trade Commission (FTC) said it has designated the practice of some businesses to cut product portions while keeping the price the same, or so-called shrinkflation, as an unfair transaction subject to penalties.

Most processed food makers and manufacturers of household supplies such as toilet paper, shampoo and detergents will have to display labels for three months if they downsize their products in a way that prompts the unit price to go up.

The rule will take effect in August after a three-month grace period, and violators will be fined 5 million won for their first offence and 10 million won for a second.

"The change was aimed at preventing a situation where companies reduce the size, standard, weight or quantity of their products without sufficient notice so that consumers unknowingly bear a substantial price increase," the FTC said in a statement.

Shrinkflation has become a headache for consumers and governments around the world as households grapple with dwindling purchasing power in the face of soaring inflation over the past few years, despite some recent signs of easing price pressures.

Surging food prices and living costs were a major issue in the run up to last month's parliamentary elections in which President Yoon Suk Yeol's ruling party suffered a stinging defeat.

Yoon's government has taken various steps in a bid to tame price rises, including cutting tariffs on food imports and putting pressure on companies to limit price hikes.

($1 = 1,364.1400 won)