UK competition authority to investigate infant formula market

The news comes after the Competition and Markets Authority (CMA) found evidence that branded formula suppliers had increased their prices by more than their input costs, essentially increasing profit margins at consumers’ expense.

UK formula prices have risen by 25% over the past two years, but the CMA found that shoppers rarely if ever switched to a lower-priced product, particularly when compared to other inflation-hit grocery items.

According to CMA’s report Price inflation and competition in food and grocery manufacturing and supply, there is ‘very weak own-label presence’ in the market, with discount supermarket chain Aldi the only retailer to produce its own brand of formula. Product prices are also stable across UK retail – CMA found that branded products did not vary across the major supermarket chains and Boots, the UK’s largest pharmacy chain, in November 2023, though Iceland offered such products cheaper than the majors and Aldi’s own-brand product was the cheapest per 100g on the market.

The findings raise questions over suppliers’ incentives to offer formula at competitive rates and whether consumers have the right information when they need it to make effective buying choices. At the same time, the regulator stressed that all formula products regardless of their pricing provide the essential nutrients required for infant health and development.

“Unlike other products examined, there is little evidence of parents switching to cheaper branded options as prices have risen and very limited availability of own-brand alternatives,” the CMA stated.