On 20 February 2024, the CMA launched its market study into the supply of infant formula in the UK. This follows its initial findings published last year which found that the average price of infant formula had risen by 25% over the previous 2 years. There were also particular concerns surrounding the lack of information to assist parents in making informed decisions about which formula they buy, and the potential absence of strong incentives for suppliers to offer infant formula at competitive prices.

In addition to the high profit margins and limited availability of cheaper, own-brand infant formula alternatives, the infant formula market is highly concentrated, with only two firms holding around 85% of the market share. 

Following these initial findings, the CMA is aiming to use this market study to gather additional evidence on: 

• Consumer behaviour, the drivers of choice, and the extent to which advice and information is available to support consumers’ decisions. 
• The role of the regulatory framework and its enforcement in influencing market outcomes.
• The existence of any barriers to entry and expansion within the infant formula market. 

By launching the market study, the CMA can use its compulsory information gathering powers (rather than relying on firms to provide information voluntarily). The CMA is currently inviting comments from interested parties and will shortly (alongside the invitation to comment and the market study notice) issue requests for information to suppliers and retailers of infant milk formula.

The CMA will have 12 months (following the publication of the market study notice) to publish its market study report, setting out its findings and the action (if any) it proposes to take. Any subsequent recommendations to government will have a formal status. Such recommendations might include considering changes to regulations governing the marketing of infant formula, or the provision of information to parents which might be required to help them to select an infant formula brand. 

If you need more information or further guidance in this area, please contact Dr Saskia King and Aimee Guzinska-Bowley.

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