The UK Competition and Markets Authority (CMA) has proposed measures to tackle the high cost and limited choice in the baby formula market. These suggestions aim to save parents up to £300 a year by encouraging them to choose lower-priced brands. The proposals include standardising packaging and labelling in hospitals to reduce the influence of branding on new parents, as well as allowing parents to use loyalty points and gift vouchers for formula purchases.
The CMA rejected the idea of a price cap on formula products, citing potential risks such as pushing up prices of cheaper brands. Instead, the CMA recommended providing clearer information in stores, with all brands displayed together, so parents can make informed decisions and easily compare prices. The watchdog also suggested removing restrictions on using loyalty points to buy formula but advised maintaining a ban on advertising formula products to avoid discouraging breastfeeding.
The CMA’s study, which began in November 2023, revealed that manufacturers raised prices by up to 36% in just two years, leading to higher profit margins during the cost-of-living crisis. The three main companies—Danone, Nestlé, and Kendal—control more than 90% of the market.
Retailer Iceland has already responded by introducing clearer labels on formula products in its stores, emphasizing that all brands meet the same nutritional standards. The CMA's proposals aim to provide more transparency and help parents make better choices. However, some industry players, like HiPP Organic UK, feel that the report misses the opportunity to foster healthier competition.