Danone to cut its baby formula prices by 7%

From Time:

Danone is cutting the wholesale price of its Aptamil infant formula by 7% in the UK after the antitrust regulator launched a probe into rising prices. The price cut will only apply to powdered formulas but not liquid milks or its Cow & Gate brand. The regulator found that 85% of the baby formula market in the UK is dominated by two companies.

The Competition and Markets Authority in the UK is reviewing the price of infant formula after finding that prices for baby formula have risen by 25% over the past two years. Danone has a market share of around 70%, and the regulator wants to better understand consumer behavior, barriers to entry and expansion for formula makers.

Formula production is heavily regulated to ensure babies receive adequate and safe nutrition. Any regulatory changes required will be published in mid-2024. There is little difference between brands, and consumers have been choosing more expensive options, prompting the CMA to launch its review. Danone had been working to absorb cost increases and make savings, but a price difference has still existed between its Aptamil and Cow & Gate brands.

Consumer goods companies and retailers have faced accusations of profiteering and political pressure to stem rising prices in the past year. This tension has led to some disputes between grocers and manufacturers, with some products being removed from shelves due to pricing rows.



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