UK CMA issues infant formula recommendations
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Following a market study into the infant formula and follow-on formula market, the Competition and Markets Authority (CMA) has issued its final recommendations.
Sarah Cardell, chief executive of the CMA, said, “Every parent wants to give their baby the best possible start in life. Many whom need, or choose, to formula feed, pick a brand at a vulnerable moment, based on incomplete information, often believing that higher prices must mean better quality. This is despite NHS advice stating that all brands will meet your baby’s nutritional needs, regardless of brand or price.
“Our proposals are designed to help parents make the best choices for them and their babies, with access to better information, while sharpening the effectiveness of the existing rules. They will also make it easier for regulations to be properly enforced, while ensuring manufacturers and retailers can be more confident in what they can and can’t do according to law.”
CMA findings
Advertising and labelling of infant formula is strictly regulated. For example, advertisement and promotion, including price reductions or deals, is restricted so as not to discourage breastfeeding.
Many parents choose a brand for the first time in vulnerable circumstances – often in hospital immediately after birth – and frequently without the clear, accurate and impartial information needed to make informed decisions. People often feel under pressure, naturally wanting to do what is best for their baby. Many actively choose a more expensive product, assuming this means better quality. However, NHS advice makes clear, “It does not matter which brand you choose, they’ll all meet your baby’s nutritional needs, regardless of price.”
Against this backdrop, rather than competing strongly on price, manufacturers place significant emphasis on building brand awareness to secure customers. For example, some regularly supply the NHS with below cost formula to reach new parents – and once parents have found a brand that works for their baby, they rarely switch.
Regulation states that the labelling and presentation of infant and follow-on formulas should be ‘clearly distinct’. Despite this, manufacturers use similar branding and labelling – including similar colour palettes, fonts and imagery – across infant and follow-on formulas. When combined with large marketing budgets, this approach indirectly supports the sale of infant formula, with CMA evidence indicating that parents are disproportionately influenced by such branding practices (be it in hospitals, online or in store).
The CMA heard concerns that parents on lower incomes are more likely to formula feed so are disproportionately impacted by infant formula pricing. While some government support is available to those eligible, most infant formulas exceed the weekly value of benefits available through schemes such as the Healthy Start and Best Start Food. This can lead to parents foregoing food in order to provide for their babies.
On pricing, differences between brands can have a sizeable impact on parents’ finances. Evidence reviewed by the CMA shows that they could make a saving of around £300 over a baby’s first year of life by switching from a popular mid-priced product to a low-priced brand.
Recommendations
The four recommendations from the CMA are:
- Removing brand influence in healthcare settings: Parents should be provided with timely, clear, accurate and impartial information on nutritional sufficiency of all infant formula products as early as possible. Where parents are given infant formula in healthcare settings, labelling should be standardised to reduce the influence of branding on their decision making. For example, branded formula could be put into non-branded containers, or the NHS could have a white-label formula.
- Equipping parents with the right information when they are shopping: Information about nutritional sufficiency should be displayed clearly and prominently on shelves and when buying online. In store, all brands of infant formula should be displayed together and in a separate cluster from other formula milks to enable quick and easy price comparisons.
- Strengthening labelling and advertising rules: All packaging should clearly display information on nutritional sufficiency. Claims that are intangible, or cannot be easily checked by parents, should be banned. Like infant formula, advertising (including price promotions and deals) for follow-on milks should be banned. To help shops, manufacturers and enforcers, government should clarify what constitutes ‘advertising’, outlining exactly what shops and manufacturers can and cannot do regarding formula milks. Parents should be allowed to use gift cards, vouchers, loyalty points, and coupons to purchase infant formula.
- Effectively enforce current and future rules: Strengthen the roles played by relevant authorities so they must approve the packaging of all infant formula products before sale. At present, companies can put products onto the market before the relevant authority has reviewed the label.
