Competition watchdog to investigate baby milk prices

The competition watchdog is launching an investigation into the baby formula market after finding manufacturers raised prices by 25% in two years and increased profit margins during the cost of living crisis.

- Mark Sweney

Two companies - Danone and Nestlé - account for 85% of sales. The Competition and Markets Authority said it was concerned there was too little choice in the market, with a very limited number of own-brand products, and that very few parents were switching to cheaper alternatives where available. If families did shop around, they could make savings of more than £500 in the first year of a child's life, the CMA found.

The investigation was announced as the watchdog published its findings on inflation in the grocery sector. The CMA concluded that over the past two years, about three-quarters of companies making popular brands in categories including baked beans, mayonnaise, pet food and baby milk had put up prices faster than their costs rose, allowing them to maintain big profit margins.