Britain’s Competition and Markets Authority (CMA) has opened a new phase of its investigation into the market for baby formula in the UK.
An earlier investigation found that the price of baby formula had climbed by 25% over the past two years.
In a statement, the CMA said a market study would now begin, allowing the regulator to use its compulsory information-gathering powers.
“We’re concerned that parents don’t always have the right information to make informed choices,” CMA boss Sarah Cardell added.
“Suppliers may not have strong incentives to offer infant formula at competitive prices.”
The CMA reported in November that prices of branded baby formula had increased above input costs over the previous two years as suppliers maintained high-profit margins.
Parents could have saved £500 over the first year of a baby’s life through cheaper, non-branded baby formulas that provide the same nutrients, according to the CMA,
Nestle and Danone (OTCQX:DANOY) are the two largest suppliers of baby formula and account for 85% of the UK market, according to the CMA.
The CMA added findings would be published in September, potentially including recommendations on government action to address marketing and information available to parents.
“We are determined to ensure this market is working well for the many new parents who depend on infant formula,” Cardell added.