The UK’s Competition and Markets Authority (CMA) today (Friday, November 8) issued a new report that sets out its concerns that parents are “paying over the odds” for baby formula.
The report highlights that the UK formula market is supplied by five main manufacturers and also examines the pricing structure of baby formula.
Current regulations in the UK dictate that companies cannot promote baby formula, including price reductions or deals, so as not to discourage breastfeeding.
As a result the CMA stated that companies “rely heavily on other ways to distinguish their products, such as brand-building and marketing”.
The authority also found that because of “limited incentives to compete on price” in relation to baby formula there is “little pressure” on manufacturers or retailers to shelter customers from increases in manufacturing costs, which it said have largely been passed on quickly and in full.
“When combined with brand loyalty and the essential nature of the product for many families, parents have been shouldering the increasing price of formula for several years,” the CMA outlined.
Baby formula
The authority has set out a number of potential options that could help improve the sector and reduce costs for parents these include:
- Information and supply in healthcare settings: providing parents with clear, accurate and impartial information, including on the nutritional sufficiency of all infant formula products;
- Information and price promotion in retail settings;
- Clarifying, monitoring and enforcing existing regulations;
- Strengthening labelling and advertising rules;
- Backstop measures (not currently recommended) – price controls and public provision: to reflect the acute issues some parents face due to high formula prices.
According to Sarah Cardell, chief executive of the CMA, the baby formula market is unique.
“We’re concerned that companies don’t compete strongly on price and many parents – who may be choosing infant formula in vulnerable circumstances and without clear information – opt for more expensive products, equating higher costs with better quality for their baby,” she said.
