Baby formula market needs shake-up amid price concerns, says watchdog

The baby formula market needs a shake-up to help parents struggling to afford it, according to the UK’s competition watchdog.

There are “limited incentives” for the industry to compete on price and parents have suffered the consequences of high prices, said an interim report by the Competition and Markets Authority (CMA).

Among its recommendations is a call for better public health messaging and clarity for parents trying to choose between different brands.

The CMA also confirmed it is examining the effect a price cap would have if introduced, but said it is not currently recommending one.

The report said: “The CMA has provisionally found that – unlike in many other grocery categories – there is little pressure on manufacturers or retailers to shelter customers from increases in manufacturing costs, which have largely been passed on quickly and in full.”

Sarah Cardell, the CMA’s chief executive, said: “This is a very important and unique market. We’re concerned that companies don’t compete strongly on price and many parents – who may be choosing infant formula in vulnerable circumstances and without clear information – opt for more expensive products, equating higher costs with better quality for their baby.

“We have identified options for change, but now want to work closely with governments in all parts of the UK, as well as other stakeholders, as we develop our final recommendations.”

The CMA expects to publish a final report in February.

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