The UK’s Competition and Markets Authority (CMA) has identified “significant concerns” over the country’s infant-formula market but will not launch an in-depth market investigation “at this stage”.
The regulator’s update, issued today (16 August), came six months into a market study into the supply of infant formula and follow-on formula in the UK launched in February,
When the CMA announced its study, it said it had identified a 25% increase in infant-formula prices in the UK between March 2021 and April 2023. It also stated that two companies controlled 85% of the UK baby-formula market; analysis revealed these to be Danone (which owns the Aptamil and Cow & Gate brands) and Nestlé (owner of SMA).
Danone and Nestlé insisted they had sought to “absorb” the increasing costs they had been facing and offer value for consumers.
Three months earlier, the CMA had reported that manufacturers had increased the unit prices on their infant formula by a higher amount than their costs had risen. It noted the moves had led to an increased unit profitability.
The scrutiny of the UK infant-formula market came amid wider concerns about ‘greedflation’, with rising grocery prices prompting scepticism of brands’ pricing strategies. Critics argued macro pressures provided a seemingly-convenient excuse for companies looking to increase profit margins.
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By GlobalData
According to today’s update, the CMA said it is “concerned that many parents and carers are paying more than they need to for infant formula”. The regulator raised further concerns around weak price competition and the ability of manufacturers to influence infant formula brand choices.
It further noted “concerns that parents and carers do not have the information they need to make well-informed purchasing decisions”.
This is a point long-championed by First Steps Nutrition Trust, a UK charity. Director Vicky Sibson previously told Just Food she wanted to see “a public health messaging campaign around the nutritional equivalence of all first infant formula, to better inform parents and carers so that they may feel more comfortable to switch to cheaper products where available”.
However, despite the concerns raised in the CMA’s update, the regulator said it will continue with its market study on infant formula, rather than pursuing an investigation.
