Key Takeaways
- The UK government has announced plans to make infant formula more affordable by allowing parents to buy it using loyalty points and vouchers.
- The move aims to save families up to £500 a year and give them confidence to choose cheaper options.
- The government has agreed to adopt proposals from the Competition and Markets Authority (CMA) to ensure parents are not pressured into buying more expensive brands.
- Charities had raised concerns that lower-income families were struggling to pay for infant formula, with some watering it down or skipping other essentials.
- The changes will also include clearer guidance on nutritional standards and the display of all infant formula together in stores.
Introduction to the Issue
The price of infant formula has increased dramatically in recent years, with a standard tin costing between £12 and £15. This has led to concerns that lower-income families are struggling to afford it, with some watering it down or skipping other essentials. The UK government has announced plans to address this issue by allowing parents to buy infant formula using loyalty points and vouchers. The move aims to save families up to £500 a year and give them confidence to choose cheaper options.
Government Plans and CMA Recommendations
The government has agreed to adopt proposals from the CMA to ensure parents are not pressured into buying more expensive brands. The CMA had warned that the current regulations, which prohibit promotions and discounts on infant formula, were unintentionally leaving consumers paying more. The changes will also include clearer guidance on nutritional standards and the display of all infant formula together in stores. The CMA had noted that the difference in prices between brands was stark, with some families able to save up to £540 a year by choosing a cheaper option.
Industry Reaction and Impact
The announcement has been welcomed by charities and industry leaders. Shereen Fisher, director of the Baby Friendly Initiative at UNICEF, said that infant formula was a basic necessity and that the move would help improve affordability and strengthen infant feeding support. Clare Murphy, chief executive of infant feeding charity Feed, said that the clarification on the use of vouchers and loyalty points was a "ludicrous restriction" that had been stigmatizing and punishing families’ feeding decisions. The British Retail Consortium (BRC) also welcomed the government’s proposed next steps, saying that they were sensible and looked forward to working through the detail to implement the necessary changes.
Regulatory Background and Context
The baby formula market is currently regulated to encourage breastfeeding, which the NHS says is healthier for children. However, the CMA had warned that this regulation was also stopping companies from competing on price, which was unintentionally leaving consumers paying more. The CMA had looked at the sector earlier in the year and recommended that it should be made much clearer to parents that all products on the shelves meet nutritional standards, so families were not pressured into buying higher-cost brands for fear of making sure their baby got the best start. Just three companies make up about 90% of the infant formula market: Danone, Kendal, and Nestle.
Next Steps and Implementation
The government has agreed to adopt the CMA’s recommendations in principle, but further action is needed on other recommendations, including the prohibition of non-verifiable messages on infant and follow-on formula labels, and extending the restriction on advertising for follow-on formula. The authorities in all four devolved nations have agreed to the government’s response. The CMA has said that it is ready to support governments and agencies across the UK in either implementing its recommendations or advising on measures that remained under consideration. The changes are expected to give parents and carers the confidence to access infant formula at more affordable prices and to make the most of supermarket loyalty schemes.