In a significant move to address concerns over the soaring prices of baby formula, major UK supermarkets, including Asda and Tesco, have joined Sainsbury’s and Iceland in announcing price reductions on Aptamil infant formula.
The decision comes in the wake of an ongoing investigation by the Competition and Markets Authority (CMA) into formula products, citing fears that they are particularly susceptible to price shocks.
The CMA’s investigation revealed a concerning 25 per cent increase in the price of baby formula over a two-year period. This surge has placed a heavy burden on families, as highlighted during the wider cost-of-living crisis last year when reports surfaced of desperate measures taken by families to ensure their babies were adequately fed.
Producers of baby formula, including major brands such as Danone, which also manufactures the Cow & Gate brand, have attributed the price hikes to higher factory costs, encompassing ingredients and energy. However, amidst growing public outcry and regulatory scrutiny, Iceland recently announced a reduction in the cost of Aptamil, prompting other major retailers to follow suit.
Asda has pledged to cut the prices of six Aptamil products, with the majority seeing an average reduction of seven per cent.
Additionally, Asda customers will now be able to use their rewards scheme vouchers to pay for baby formula, a move aimed at assisting families in managing their budgets during challenging times. Tesco has also joined the initiative by lowering the prices of five Aptamil products by amounts ranging from 80p to £1, effective from Tuesday.
Kris Comerford, Asda’s Chief Commercial Officer, accentuated the importance of swift action to pass on falling manufacturing costs to customers, particularly given the essential nature of baby formula in many families’ weekly shopping lists. The removal of exclusions on using Asda rewards vouchers for baby formula aims to further alleviate financial pressure on families.
He said: “For many of Asda’s customers, and families nationwide, we understand that buying baby formula is a vital necessity in their weekly shop, which is why we’re taking swift action to pass on falling manufacturing costs to customers before any other retailer.”
“At the same time, we’ve decided to remove exclusions on using Asda rewards vouchers…. to help families manage their budget and keep their family fed.”
The reduction in Aptamil prices follows Danone’s agreement to cut the wholesale price of its Aptamil infant powdered formula by seven per cent, responding to the CMA’s investigation into inflation within the market.
Danone, a major player in the baby formula market, owns 71 per cent of the market share in the UK, where manufacturers have collectively increased prices by 25 per cent over the past two years.
Data compiled by the public health nutrition charity First Steps Nutrition Trust (FSNT) revealed alarming price hikes, with an 800g pack of Danone’s Aptamil formula rising by 26 per cent to approximately £14.50 between March 2021 and April 2023.
The same-sized pack of Cow & Gate 1 experienced a 31 per cent increase during this period. For families opting for premium formula options, the cost of feeding a child with products from dominant market players like Danone and Nestlé can amount to up to £1000 annually.
The CMA’s report also shed light on the limited availability of own-brand alternatives and the lack of evidence of parents switching to cheaper branded options.
Despite potential savings of over £500 annually by choosing the cheapest formula available, the inertia to switch brands is attributed to a lack of information and guidance within the health system.
“Unlike other products examined, there is little evidence of parents switching to cheaper branded options as prices have risen and very limited availability of own-brand alternatives,” the CMA stated.
Current public health and nutrition policies mandate that all infant formula brands must provide the necessary nutrients for healthy infant growth. However, the aggressive marketing practices of major corporations often lead families to opt for familiar brands, despite the prohibition of direct marketing of baby formula in the UK.
Research conducted in 2023 by public health expert Rana Conway and her colleagues highlighted the influence of familiarity and advertising on parents’ formula choices. Families often choose brands they recognize from other contexts, even when aware that marketing claims on formula tins may not accurately reflect the product’s quality.
“To be honest, I think most of it just came up from actually what I’d seen over my lifetime of adverts and TV things, and what became like a familiar sort of brand that you’d heard of,” said one of the mothers interviewed in Conway’s study, reflecting on her choice of formula brand.
With breastfeeding rates in the UK still below optimal levels, the impact of formula pricing on the quality of life for thousands of families is evident.
