Regulators have proposed sweeping changes for the baby formula industry, saying high prices and branding are leading to “poor outcomes” for parents.
In its final report on surging prices in recent years, the Competition and Markets Authority (CMA) said parents could be saving £300 annually by switching to lower-priced brands that offered the same nutritional benefits.
But the watchdog stopped short of recommending that bans on price promotions be overturned.
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The report was released nearly two years after Sky News revealed how a black market for baby formula had evolved as desperate families struggled to feed their children.
Parents openly described having no choice but to steal products, no longer able to afford formula as prices soared above inflation.
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The CMA has previously reported a 25% increase in prices over the past two years, with just three companies – Nestle, Kendamil and Danone – controlling 90% of the market.
The watchdog had determined that the lack of manufacturers meant there was no incentive to compete on prices, which meant additional factory costs had been passed on “quickly” and in full to shoppers.
The CMA, which has no powers to bolster competition by increasing the number of formula producers, said its four main recommendations were aimed at delivering better outcomes for parents on both choice and price.
It said packaging should be standardised and clearly display nutritional information, while any claims that cannot easily be checked by parents should be banned.
It also recommended extending the ban on advertising to include follow-on formula, and allowing parents to use vouchers and loyalty points to buy infant formula.
Sarah Cardell, chief executive of the CMA, said many parents “pick a brand at a vulnerable moment, based on incomplete information, often believing that higher prices must mean better quality”.
“This is despite NHS advice stating that all brands will meet your baby’s nutritional needs, regardless of brand or price.”
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