A Formula for Change: CMA issues final recommendations in Infant Formula market study
Contacts
As previously reported here, and more recently here, the Competition and Markets Authority (“CMA”) initiated an in-depth study into the supply of infant and follow-on formula in the UK in February 2024.
This was predominantly due to concerns regarding weak pricing competition in the market, branding influencing consumer choice (despite all formulas being subject to the same compositional requirements) and consumers not having the information they need to make informed purchasing decisions.
The CMA found that often, the choice of formula brand was made in hospital, immediately after the birth of the child, without clear, impartial or accurate information. Many therefore opt for the more expensive product, incorrectly assuming it is of better quality, despite NHS advice being clear that “It does not matter which brand you choose, they’ll all meet your baby’s nutritional needs, regardless of price”.
As a result, rather than competing on price, manufacturers were found to be focusing on brand awareness to attract new customers.
The CMA has now concluded its market study and has issued four main recommendations for governments:
- Removing brand influence – in a healthcare setting, labeling should be standardized to reduce branding influencing decisions e.g. the NHS could have non-branded white-label formula.
- Nutritional information – nutritional sufficiency information should be clearly displayed on shelves and online, and formula should be displayed together in-store to enable quick and easy comparisons.
- Labeling and advertising rules – all packaging should clearly display nutritional sufficiency. Advertising and intangible claims for follow-on formula should be banned as well as price promotions and deals (in line with the existing rules for infant formula) to avoid discouraging breastfeeding. The CMA also recommended that formula should be able to be purchased using gift cards, vouchers, loyalty points or coupons.
- Effective enforcement – strengthen the role of relevant authorities so they must pre-approve packaging before sale.
The CMA believes these recommendations could lead to parents/carers saving around £300 a year by switching from a mid-priced product to a cheaper brand, as all formulas will meet the nutritional needs of the baby/infant.
Next Steps
The CMA will now engage with UK, Scottish, Welsh and Northern Irish governments on how to best implement these recommendations. This will include clarifying what constitutes ‘advertising’ and how formula can be sold and priced, in-store and online.
As a lot of formula is initiated or chosen for the first time in hospitals, there will no doubt also be need for new NHS specific policies or guidance updates.
For more information, please contact Dr Saskia King, Ariane Le Strat, Tenisha Cramer and David Pemberton.
