UK Watchdog Proposes Ending Baby Formula Promotion Ban to Ease Parental Costs
Source: DairyNews.today
The UK’s Competition and Markets Authority (CMA) has suggested lifting a ban on baby formula price promotions, aiming to relieve financial pressure on parents facing high formula costs. The CMA’s interim report on the baby milk formula market urges significant changes to make formula more affordable and accessible.
The report's recommendations include creating NHS-branded baby formula, offering unbranded baby milk in hospitals, and improving transparency around infant nutrition, while stopping short of recommending price controls. "We’re concerned that companies don’t compete strongly on price, leading many parents to pay more," said CMA Chief Executive Sarah Cardell, noting parents often equate higher prices with superior quality for their children.
Just three companies—Danone, Nestle, and Kendamil—dominate over 90% of the UK’s baby formula market. Over the past two years, prices have surged by 18-36%, depending on the brand, according to CMA analysis. The report estimates that switching to a lower-priced brand could save parents up to £500 in a baby’s first year.
Parenting charity NCT echoed the need for market reforms. “Formula milk prices are skyrocketing, and new parents are forced to choose between what they think is best for their baby and essential living costs,” said Maxine Palmer from NCT. Current regulations treat formula promotions similarly to tobacco and lottery tickets, banning discounts and loyalty points to promote breastfeeding, which the NHS advocates for child health.
The CMA noted that the ban on price promotions might inadvertently prevent competition and result in higher consumer costs. Allowing promotions, it argued, could stimulate price competition and make formula more affordable.
In response, some retailers have begun to push back on restrictions. Asda recently began permitting loyalty points for baby formula purchases, and Iceland has voiced criticism of the ban.
The report also raised concerns about misleading branding that might confuse parents. For example, terms like “advanced” or “premium” could suggest quality differences, even though all formula products must meet UK nutritional standards. The CMA recommended clearer separation between infant and follow-on formula brands and standardized packaging in hospitals to avoid endorsements of specific brands.
Other recommendations included:
The CMA initiated its investigation following sharp increases in baby formula costs and plans to release a final report in February 2024. Danone and Nestle expressed support for clearer parental information, while Kendamil noted its unique position as the sole British-made formula, working to reduce prices for UK families.
Just three companies—Danone, Nestle, and Kendamil—dominate over 90% of the UK’s baby formula market. Over the past two years, prices have surged by 18-36%, depending on the brand, according to CMA analysis. The report estimates that switching to a lower-priced brand could save parents up to £500 in a baby’s first year.
Parenting charity NCT echoed the need for market reforms. “Formula milk prices are skyrocketing, and new parents are forced to choose between what they think is best for their baby and essential living costs,” said Maxine Palmer from NCT. Current regulations treat formula promotions similarly to tobacco and lottery tickets, banning discounts and loyalty points to promote breastfeeding, which the NHS advocates for child health.
The CMA noted that the ban on price promotions might inadvertently prevent competition and result in higher consumer costs. Allowing promotions, it argued, could stimulate price competition and make formula more affordable.
In response, some retailers have begun to push back on restrictions. Asda recently began permitting loyalty points for baby formula purchases, and Iceland has voiced criticism of the ban.
The report also raised concerns about misleading branding that might confuse parents. For example, terms like “advanced” or “premium” could suggest quality differences, even though all formula products must meet UK nutritional standards. The CMA recommended clearer separation between infant and follow-on formula brands and standardized packaging in hospitals to avoid endorsements of specific brands.
Other recommendations included:
- Clearly separating infant and follow-on formula brands to avoid brand loyalty bias.
- Considering NHS-branded formula sold at reduced prices.
- Strengthening online sales rules.
- Ensuring parents have access to clear, impartial information about nutritional sufficiency.
- Providing more timely NHS information, like clarifying that follow-on milk is unnecessary.
The CMA initiated its investigation following sharp increases in baby formula costs and plans to release a final report in February 2024. Danone and Nestle expressed support for clearer parental information, while Kendamil noted its unique position as the sole British-made formula, working to reduce prices for UK families.
