New probe launched into supply of baby formula milk after 25% price hike
The Competition and Markets Authority (CMA) has launched an investigation into the baby formula milk market due to concerns over high prices.
The watchdog found that prices had risen by 25% in the past two years. The CMA said last year that the baby formula market was dominated by just two companies, accounting for 85% of sales.
This meant few parents switched brands as prices increased. The CMA revealed that infant formula prices were up by a quarter on average over two years. It found that parents could save more than £500 in the first year of a baby's life by choosing cheaper formula options.
Despite some product prices falling since November, they remained "at historically high levels". The study will examine consumer behaviour, market regulation, and barriers to entry and expansion in the formula market.
The CMA plans to publish a final report in September. If problems are identified, it could recommend new regulations on how formula is marketed or on the information provided to parents to help them choose formula brands.
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Sarah Cardell, the boss of the CMA, said: "Whilst it's a positive sign that prices of some products have fallen since our update last November, the cost of infant milk remains at historically high levels. We're concerned that parents don't always have the right information to make informed choices and that suppliers may not have strong incentives to offer infant formula at competitive prices."
"We are determined to ensure this market is working well for the many new parents who depend on infant formula and it's essential that any changes we propose are based on evidence and a strong understanding of the market."
The CMA is also going to check out special baby milks for medical needs and different kinds of milk for toddlers.
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