CMA calls for shake-up of baby formula market

(Sharecast News) - UK watchdog the Competition and Markets Authority has called for a shake-up of the baby formula market in an effort to help parents struggling to afford it.

The CMA said there were "limited incentives" for the industry to compete on price and stated parents had suffered the consequences of high prices, reporting a 25% increase in prices over the last two years. It also highlighted that Nestle and Danon controlled a combined 85% of the market.

The CMA called for better public health messaging and clarity for parents trying to choose between different brands and also confirmed that it was looking into what effect a price cap would have.

Sarah Cardell, chief executive of the CMA, said: "This is a very important and unique market. We're concerned that companies don't compete strongly on price and many parents - who may be choosing infant formula in vulnerable circumstances and without clear information - opt for more expensive products, equating higher costs with better quality for their baby.

"We have identified options for change, but now want to work closely with governments in all parts of the UK, as well as other stakeholders, as we develop our final recommendations. Importantly, any changes must continue to support regulation that ensures all formula gives babies the nutrition they need to thrive - as well as supporting governments' aims on breastfeeding."

The CMA expects to publish its final report in February.

Reporting by Iain Gilbert at Sharecast.com