NHS-Branded Baby Formula Could Prevent Parents Paying ‘Over the Odds’: Watchdog

A baby in a high chair looking towards her bottle of milk on Nov. 20, 2023. Andrew Matthews/PA

An NHS-branded baby formula could soon hit supermarket shelves, allowing parents to pay a more affordable price than those currently offered by existing manufacturers.

The UK Competition and Markets Authority said on Thursday that the baby formula market needs a shake-up, with prices too high for many families. The watchdog’s interim report on the infant formula market revealed limited competition on formula prices in shops.

Sarah Cardell, Chief Executive of the CMA, said in a statement: “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.”

The UK baby formula market is dominated by three manufacturers—Danone, Kendal, and Nestle—which together account for 90–100 percent of supply.

Prices for infant formula powder increased by 18–36 percent between December 2021 and December 2023, the report found. It also said that manufacturers have little incentive to compete on price, passing on increases in costs to customers “quickly and in full.”

The watchdog also found that parents tend to choose a more expensive product, assuming a higher price means better quality.

“This is despite NHS advice that ‘It does not matter which brand you choose, they’ll all meet your baby’s nutritional needs, regardless of price’,” the CMA said.

Measures to regulate the market may see a potential intervention by the government and launch of baby formula under NHS branding. The contract to procure the product may involve a third-party manufacturer at a competitive price.

“This would introduce greater choice for parents and a lower price point. In turn, it may also put downward pressure on other manufacturers’ prices,” the report said.

Liberal Democrat MP Liz Jarvis said on social media platform X that a shake-up of the baby formula market was “long overdue.”

“Far too many parents feel pressured into paying over the odds when they are at their most vulnerable. More must be done to protect those struggling,” Jarvis said.

Recommendations

The CMA issued a number of recommendations to improve sector competition and reduce costs for parents. It called for baby formula products to display clear and accurate messages on their nutritional value.

Parents should be able to choose from a wider range of options, including standardised packaging in hospitals, to reduce the influence of branding, the report said.

Manufacturers should follow stricter thresholds for the messages displayed on infant and follow-on formula, it added.

The CMA is also looking into a potential price cap, though it stopped short of recommending one. The watchdog will consider feedback to its recommendations and will work closely with the government, before it published the final report in February 2025.

Responding to the CMA report, the First Steps Nutrition Trust and the Baby Feeding Law Group UK released a statement saying urgent action was needed to protect families from surging costs.

Campaigners called for a significant price intervention, such as a cap on infant formula.

“However, we would caution the CMA against incentivising competition on price by potentially permitting prices and price reductions be publicised as global evidence shows this incentivises purchase, undermining breastfeeding,” the statement added.

A report by the Food Foundation charity, published on Thursday, revealed that the most expensive first infant formula on the market is now twice as expensive as the cheapest alternative, despite being nutritionally comparable.

Anna Taylor, the charity’s executive director said one in four mothers struggle to afford first infant formula.

“First infant formula is absolutely essential for those families dependent on it, yet we know that one in four mothers struggle to afford it.

“This is too important to be left to the market. We need the government to step in and make sure that first infant formula is affordable for those who need it,” Taylor said.