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UK Competition Regulator Launches Inquiry into Infant Formula Market

 |  February 21, 2024

In response to concerns about rising prices and market dominance, the UK’s Competition and Markets Authority (CMA) has initiated a comprehensive examination of the country’s infant formula market. This move comes after a notable surge in prices within the sector over the past couple of years, prompting scrutiny into the practices of key players like Nestlé and Danone.

The CMA announced the commencement of a thorough “market study” into the supply of infant formula in the UK, with a particular focus on understanding the factors contributing to the price hikes observed in recent times. This decision follows revelations from November, when the authority revealed that average prices for infant formula had spiked by a significant 25% over the preceding two-year period.

With the launch of this investigation, the CMA intends to leverage its compulsory information-gathering powers, enabling it to delve deeper into the intricacies of the market dynamics. This marks a departure from relying solely on voluntary disclosures from firms operating within the sector.

The infant formula market in the UK is primarily dominated by two major companies, Nestlé and Danone, who collectively account for a substantial portion of the products sold in the country. The pervasive influence of these industry giants underscores the importance of ensuring fair competition and consumer welfare within the market.

Read more: UK’s CMA Increasingly Hostile to Business, Says INEOS Chair

Concerns have been mounting regarding the impact of escalating prices on families and caregivers, particularly amidst economic uncertainties and inflationary pressures. As such, the CMA’s intervention is viewed as a proactive step towards safeguarding consumer interests and fostering a competitive landscape that promotes affordability and choice.

Industry stakeholders, including manufacturers, retailers, and consumer advocacy groups, are keenly awaiting the outcome of the CMA’s investigation, which is expected to shed light on potential anti-competitive practices and market distortions. The findings of the market study are anticipated to inform future regulatory actions aimed at fostering a more transparent and equitable infant formula market in the UK.

The initiation of this inquiry underscores the UK government’s commitment to upholding fair competition and protecting consumers from undue price hikes and monopolistic behavior.

Source: Just Food