Infant formula manufacturer Danone is to cut the wholesale price of its Aptamil baby powder product by 7% following an investigation by the Competition and Markets Authority.
Danone’s price cut currently applied to only its powdered Aptamil formulas sold to UK retailers, but not other baby drink products, such as liquid infant milk.
Late last year the French company, which also owns the infant formula brand Cow & Gate, was found to represent 71% of the baby powder sector in the UK and to have raised prices by 25% in two years, according to the UK’s competitions regulatory body.
The report revealed that an 800g pack of Danone’s Aptamil formula increased by 26% to £14.50 between March 2021 and April 2023, while an 800g pack of Cow & Gate rose by 31% during that same period.
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The CMA’s investigation, which accused branded suppliers of having “pushed up prices more than cost increases”, arguing that these brands had “contributed to higher food price inflation“.
The watchdog’s report prompted criticism by many in the industry including frozen food specialist Iceland boss Richard Walker who lashed out at high baby formula prices, calling it an “exploitation” of new parents.
Danone’s decision to lower its prices may encourage other major food brands to do the same, including baby powder brands Little Steps and SMA which represent 14% of the market and are owned by Néstle.
Earlier this month, Danone told Grocery Gazette that it was intending to lower prices in order to help tackle the “challenges faced by parents due to inflation”.
“During this difficult period, we have worked very hard to absorb the significant cost increases we have faced, make savings, and minimise any price increases. Danone is proud to offer parents – who cannot or choose not to breastfeed – a range of formula milk products at different prices.”
The company added: “In order to offer parents the best value, and to ensure we are as competitive in the market as possible, we have launched new larger, better value formats. We currently offer the best value formula milk pack on the market. We have also launched a new smaller, low priced pack size to support budget-conscious families, including those conscious of their weekly budgeting.
