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UK Supermarkets Slash Aptamil Prices Amid Antitrust Scrutiny

 |  January 15, 2024

Asda becomes the second major supermarket to slash Aptamil baby formula prices after Danone’s 7% reduction to retailers, responding to consumer concerns and a recent investigation by the Competition and Markets Authority (CMA).

In a bid to address rising concerns over the escalating prices of baby formula, Asda has announced a substantial reduction in the cost of Aptamil, following in the footsteps of Iceland. The move comes after manufacturer Danone agreed to a 7% price cut for retailers, a decision that is expected to reverberate across the industry.

Last week, Iceland declared its intention to cut the prices of Aptamil, starting January 16, following Danone’s commitment to reducing the offered price of its Aptamil powdered formula by up to 7%. While Danone sets the manufacturer’s price, it is ultimately the retailers who determine the shelf prices of the products.

Asda, however, has taken the initiative to implement a significant reduction in the prices of six Aptamil product lines, with the majority seeing an average decrease of 7%. Five Aptamil core products will witness a drop from either £14.50 or £14 to £13.50, and the Aptamil Advanced 1 First Formula Baby Milk Powder from Birth will see a decrease from £19 to £18.

Read more: UK Watchdog Tackles Supermarkets’ Unit Pricing

Kris Comerford, Asda’s chief commercial officer, highlighted the importance of addressing the needs of their customers, stating, “For many of Asda’s customers, and families nationwide, we understand that buying baby formula is a vital necessity in their weekly shop, which is why we’re taking swift action to pass on falling manufacturing costs to customers before any other retailer.”

In an effort to further assist families in managing their budgets, Asda has also announced that customers can now use their rewards scheme vouchers to pay for baby formula, a move that is expected to provide additional relief for families facing the financial strain of purchasing essential items.

This development comes in the wake of the Competition and Markets Authority’s (CMA) recent investigation into the baby formula market, revealing a staggering 25% increase in formula prices over the past two years. The CMA has expressed concerns about the vulnerability of the market to higher-than-inflation price rises, and is currently scrutinizing the industry for potential antitrust issues. The regulator noted that the lack of competition is due in part to consumer loyalty to specific brands, either based on recommendations from friends and family or due to a baby’s preference for a particular formula.

Source: UK Finance Yahoo