One of the largest baby milk formula manufacturers, French firm Danone, has announced a 7% price reduction for its Aptamil formula brand. This decision comes after the competition watchdog accused the company of taking advantage of financially strained families.
Price Cut in Response to Rising Costs
Last year, research revealed that baby formula prices had surged by 24% over the past two years. The cheapest brand, Mamia from Aldi, saw a staggering 45% increase. In light of these findings, Danone, a £35 billion company, has decided to lower the price of its Aptamil formula brand.
Nestlé's Response
When questioned about potential price reductions, a Nestlé spokesperson stated that the company has been working diligently to ensure their products remain affordable for parents.
Impact on Struggling Families
The sharp increase in baby formula prices has placed a significant burden on struggling families. The soaring costs have made the cheapest tin of baby milk unaffordable, especially since the Healthy Start vouchers are capped at £8.50. Currently, an 800g tub of Aptamil formula is priced at £14.50.
Price Cuts and Exclusions
Danone's price cuts will be implemented next week, but they will not apply to its cheaper Cow & Gate formula range.
Restrictions on Discounts
Legislation prohibits retailers from offering discounts and loyalty points on baby formula, as a means to encourage breastfeeding. However, NHS figures show that 75% of parents use formula at some point during the first eight weeks of their baby's life.
Response from Iceland and Kendamil
Iceland CEO Richard Walker, who has been actively campaigning for lower formula prices, expressed his support for Danone's reduction. Iceland will pass on all of the savings to customers, lowering the price to £11.20. However, Walker accused rival brand Kendamil of increasing their prices. In response, Kendamil director Will McMahon argued that their £9.25 formula is still £9 cheaper than Aptamil Advance and £2.50 cheaper than Danone's formula.
Lack of Competition and Rising Prices
The Competition and Markets Authority raised concerns about weak competition in the baby formula market, leading to inflated prices that surpass inflation rates. Food companies' profits have continued to rise, prompting the watchdog to address these issues.
The watchdog stated, "Infant formula is an essential, non-substitutable product, and there have been concerning reports of struggling consumers resorting to shoplifting or buying it on the black market."
