Suggestions include standardised packaging in hospitals to tackle power of branding but CMA decides against price cap. Baby formula could be placed in standardised packaging in hospitals, the UK competition watchdog has suggested, while parents should be allowed to use gift vouchers and loyalty card points to buy formula milk, as part of efforts to combat soaring prices and lack of choice in the market.
Labelling of infant formula in hospitals or other healthcare locations should be standardised, the Competition and Markets Authority (CMA) suggested, with formula put into non-branded containers to tackle the power of marketing, or the NHS could offer its own variety. The CMA proposed five measures on Friday, which it says will improve outcomes for parents and could allow them to save £300 a year by switching to a lower-price brand, after a year-long study into the infant formula market.
However, the regulator has decided against recommending regulations such as a price cap on baby formula or a profit-margin cap, which the Greek government did last year with the aim of making products more affordable. The CMA said such a move would “involve significant risks”, and could push up the prices of cheaper formula products to reach the ceiling, leading to some parents “missing out on cheaper options on the market”.
It also warned that a price cap could be difficult to implement, but said that UK governments could keep this option as a “backstop” if its proposals do not manage to bring prices down for parents. The watchdog said that parents often choose a brand of formula for their baby at a time when they are vulnerable, often in hospital immediately after birth, when they do not have “clear, accurate and impartial information needed to make informed decisions”. As a result, many choose a more expensive, branded product, as they assume it will be higher quality, and then remain loyal to that brand.
Sarah Cardell, the chief executive of the CMA, said many parents who “need, or choose, to formula feed, pick a brand at a vulnerable moment, based on incomplete information, often believing that higher prices must mean better quality”. She added: “This is despite NHS advice stating that all brands will meet your baby’s nutritional needs, regardless of brand or price.”. Under the proposals, parents would be provided with more information in shops, with all brands displayed together, to remind them that all formula products meet babies’ nutritional and safety needs, while allowing them to make quick and easy price comparisons.
The ban on advertising of formula should be extended to follow-on milks, aimed at older babies, the CMA recommended. Sign up to Business Today. Get set for the working day – we'll point you to all the business news and analysis you need every morning. after newsletter promotion. Advertising of baby formula, as well as price reductions and deals, have been restricted to avoid discouraging breastfeeding. The CMA launched its investigation into the UK market in November 2023 after finding that manufacturers raised prices by as much as 36% on some brands in two years and managed to increase profit margins during the cost of living crisis.
