It follows the publication of its groceries sector review in November last year, which questioned whether ineffective competition in the baby formula market could be leading to parents paying higher prices.
The CMA will now use it compulsory information gathering powers to collect additional evidence on the role of the regulatory framework and its enforcement in influencing market outcomes; the supply-side features of the market; and consumer behaviour, the drivers of choice and the information and advice available to consumers to support their decisions.
Considered actions
Following this, the CMA will consider whether there are problems in the market and – if so – what actions could or should be taken to address them. Actions could range from making recommendations to government on the regulations governing how infant formula is marketed to how information is provided to parents to help them choose an infant formula brand.
The CMA intends to conduct the market study ‘as swiftly as possible’ with the intent of publishing a final report in September 2024. Any recommendations to government resulting from the work will now also have a formal status.
Sarah Cardell, chief executive 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.
Lack of information
“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. That’s why we’ve now decided to take forward our work on infant formula as a market study, using our formal legal powers.”
Meanwhile, last year, the CMA announced that it would investigate “green” claims made by consumer goods group Unilever.
