The Competition and Markets Authority (CMA) has found that rigid regulations governing the advertising of baby formula are pushing up costs for UK parents.
In a bid to tackle the product’s “historically high” prices, the regulator launched an investigation earlier this year to understand why the average baby formula price rose by 25% in just two years.
It found that strict restrictions prevented baby formula marketers from promoting price reductions, which traditionally helps to soften competition around price.
Amid long-held concerns that parents up and down the country are consistently overpaying for the product, the CMA is now questioning the benefit of these regulations and whether they are being enforced effectively.
The regulator is now set to draw up a list of recommendations for the new Labour government for regulatory reforms as quickly as possible according to The Guardian, after identifying significant concerns in how manufacturers are behaving.
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“The CMA has identified significant concerns that the combined effect of the current regulatory framework, the behaviour of manufacturers and suppliers and the needs and reactions of people buying formula, are resulting in poor market outcomes” a CMA statement read.
“The CMA considers these concerns will be best addressed by progressing with our market study and developing recommendations to governments to improve these market outcomes rather than moving to a more extensive market investigation.”
The CMA is now expected to publish an interim report about the issue in October, after its investigation also found that parents could be saving up £500 over a baby’s first year by switching to cheaper options.
A Danone UK spokesperson added: “Danone notes that the Competition and Markets Authority has decided not to make a market reference at this stage. We will continue our cooperation with the CMA regarding its market study and ensuring parents are supported as much as possible.
“We will also continue to work constructively on ways we can carry on delivering innovation and value to parents. In Danone’s experience, the UK formula milks market is competitive and dynamic.”
