The Competition and Markets Authority (CMA) has expressed concern over the rising costs of baby formula in the UK, stating that consumers are paying excessively high prices. The regulatory body has suggested measures, including a price cap, to address this issue.
Recent findings from the CMA’s interim report reveal that baby formula prices in the UK have surged between 18% and 36% from December 2021 to December 2023. This significant price increase has prompted the authority to propose steps aimed at enhancing competition within the market. Such measures involve permitting companies to advertise price reductions and reinforcing existing regulations.
Another proposal includes improving parental education regarding product choices to combat misleading marketing tactics. The CMA noted that current advertising prohibits promotions like discounts for baby formula, to promote breastfeeding, leading to confusion among parents who might associate higher costs with better quality products.
The regulatory body identified extensive cross-marketing practices where companies employ analogous packaging and branding across their products. This strategy, exacerbated by advertising restrictions, has made it challenging for parents to distinguish between options. Despite a diverse market, supermarket own-label baby formulas constitute less than 5% of the market, while brands like Danone, Nestlé, and Kendal Nutricare dominate over 90% of supply.
In response, Danone acknowledged the competitive nature of the market and expressed its commitment to delivering value to parents. Nestlé reiterated its support for families’ feeding choices along with its dedication to providing affordable and accessible products while ensuring fair pricing for suppliers.
Sarah Cardell, the chief executive of the CMA, emphasised the consultation process initiated by the authority to gather insights from the government and other stakeholders. The findings from this process are expected to inform the CMA’s final recommendations, set to be released early next year.
The CMA’s ongoing investigation into the baby formula market reflects a commitment to ensuring fair pricing and competition. By consulting with industry and governmental stakeholders, the authority aims to establish strategies that will protect consumers, particularly parents navigating these vital purchases for their infants.
