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CMA launches market study into supply of infant formula

(Sharecast News) - Watchdog the Competition and Markets Authority has launched a market study into the supply of infant formula in the UK, after first looking into the market back in November 2023. The CMA said on Tuesday that it intends to conduct its market study "as swiftly as possible" and intends to publish its final report in September.

The market study will look to gather additional evidence on consumer behaviour, the drivers of choice, and the information and advice available to consumers to support their decisions, as well as the role of the regulatory framework and its enforcement in influencing market outcomes and the supply-side features of the market.

Following the study, the CMA will consider whether there are problems in the market and, if so, what actions could or should be taken to address these - potentially including making recommendations to Westminster.

The CMA's move follows its Autumn 2023 report into price inflation and competition in the groceries sector, which found that the average price of infant formula had risen by 25% over the previous two years and that families could make "significant savings" of more than £500 over the first year of a baby's life, through buying cheaper infant formula options.

CMA chief executive Sarah Cardell 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. 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."

Reporting by Iain Gilbert at Sharecast.com

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