The Competition and Markets Authority (CMA) has warned that restrictions around the advertising of infant formula may be contributing to the current “historic high” prices.

The competition watchdog released an update to its ongoing study into the infant formula milk market and found that the ban on advertising and other promotional and commercial activities could be “softening” competition on price, “since price reductions cannot be promoted”.

Alongside this concern, the regulatory body said that it was also considering whether some brands are having an advantage by finding loopholes in the advertising restriction laws, to indirectly promote their products.

The CMA argued that any brands taking advantage of this loophole – for example, “via marketing of follow-on formula and growing up milks” – could influence parents and carers choices.

A final area it is due to explore includes the way in which parents and carers behave in the market, and how price can be used as a proxy for quality, driving competition.

The CMA acknowledged that this decision is often made in “vulnerable circumstances, for clinical reasons, in healthcare settings after birth”, but this causes brand loyalty and a reluctance to switch, making it harder for new brands to gain market share due to these “considerable barriers”.

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The watchdog added that it is due to publish an interim report in October, before preparing a final market study report that would consider what action could be taken. However, it also today (16 August) made a decision to not conduct an in-depth market investigation, citing the “pressing impact on parents.”

The CMA added: “Given the pressing impact on parents and carers, the key role of the regulatory framework and the vital public health objectives involved, we want to get as quickly as possible to the point where we have fully diagnosed any problems in the market and so can offer workable options for governments to consider to address these.”

The CMA’s latest update comes amid an ongoing investigation into the baby formula market first launched in February this year, as the watchdog’s CEO said prices remained at “at historically high levels”.

CMA CEO Sarah Cardell said at the time said: “Infant formula is a key part of the weekly shop for many parents across the UK, who rely on these products to ensure their baby gets all the essential nutrients they need.

“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.”