United Kingdom

The government could offer its own low-cost baby formula under a brand such as the NHS to combat the high prices and lack of choice in the market, the UK competition watchdog has suggested.

The Competition and Markets Authority (CMA) said another “backstop” measure could be for the government to regulate and set a price or profit-margin cap on retailers as a way to bring prices down for parents more quickly.

The potential measures formed part of the CMA’s interim report on the infant formula market after the watchdog identified that a lack of competition in the market had led to soaring prices, taking advantage of an ingrained belief among parents that higher cost equates to better quality for their children.

The CMA report set out a number of potential recommendations including extending the ban on the advertising of infant formula to follow-on formula, or going as far as “prohibiting all brand-related advertising”.
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The provisional findings, which will feed into a final report to be published early next year, include some backstop measures that the CMA said were not actively recommended but that the government could make “with the aim of bringing prices down directly”.

One option was for the government to procure its own infant formula from a third-party manufacturer at a competitive price and sell it under an established name, such as the NHS, or invest in creating a new brand for the market.
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Another option is to introduce regulations to place a maximum price cap on baby and infant formula, or establish a profit-margin cap, which the Greek government did earlier this year with the aim of making products more affordable.