UK Watchdog Warns Parents Are Paying Too Much for Baby Formula Due to Weak Competition

Parents and carers in the U.K. are paying more than necessary for baby formula due to a lack of robust price competition, a report by the Competition and Markets Authority (CMA) has revealed. The CMA, the U.K.’s competition watchdog, expressed “significant concerns” over the regulatory framework and market behavior but has opted not to conduct a more extensive investigation into the sector.

The CMA launched a market study in February after finding that prices for baby formula and toddler formula had surged by 25% over the past two years. The watchdog had already raised alarms over the market’s concentration, with just two companies controlling 85% of sales. After six months of research, the CMA concluded that the market is not functioning effectively to ensure that consumers receive the best value.

“Based on the evidence we have reviewed to date, we are concerned that many parents and carers are paying more than they need to for infant formula,” the CMA stated. The regulator pointed to weak price competition and noted that manufacturers have been able to influence brand choices among consumers.

One of the key issues identified by the CMA is the strict advertising rules surrounding baby formula. These regulations limit how brands can market their products, which has inadvertently hindered price competition by preventing the promotion of price reductions.

The CMA plans to release an interim report on its findings in October and will engage further with the Government to address the issues in the sector.

Source: KentLive