Iceland, a UK-based supermarket chain, has announced that it is cutting the prices of 13 lines of branded baby formula products by up to 20%, as part of its £26m investment into lowering prices in 2023. The move comes amid an ongoing investigation by the UK’s Competition and Markets Authority (CMA) into the baby formula industry, which has seen prices rise by an average of 25% in the past two years.
Iceland challenges baby formula manufacturers and regulators
Iceland said that it is reducing the prices of baby formula products from Nestlé, Danone, and Abbott, which account for 85% of the UK market. The price cuts will apply to The Food Warehouse stores and online through Iceland’s website, and will be followed by a roll-out across Iceland stores.
Richard Walker, executive chairman of Iceland Foods, said that the company has a “moral obligation to take action” and challenge the manufacturers, the regulators, and the market as a whole to bring prices down. He said that Iceland is the only retailer that has publicly supported the CMA’s investigation, which was launched in November 2023.
Walker also called for a change in the UK’s Infant Formula and Follow-on Formula Regulations 2020, which prohibit retailers from promoting price reductions on baby formula products. He said that these regulations are “outdated and unfair” and prevent consumers from accessing the best deals.
CMA probes baby formula industry over price hikes
The CMA’s investigation into the baby formula industry was triggered by a Sky News report in September 2023, which revealed the impact of high prices on families. The report showed that some parents were resorting to watering down formula, buying expired products, or switching to cheaper alternatives to feed their babies.
The CMA said that it found evidence of “significant and sustained” price increases in the baby formula sector, which could not be explained by changes in costs or demand. The CMA also said that it had concerns about the lack of competition and innovation in the market, as well as the potential exploitation of consumers.
The CMA said that it will use its compulsory information gathering powers to obtain more data and evidence from the manufacturers and retailers, and will publish its findings by the end of 2024. The CMA has the power to impose fines, order remedies, or refer the case to a more in-depth investigation if it finds any breaches of competition law.
Iceland receives praise from charity and consumers
Iceland’s decision to cut baby formula prices has been welcomed by Feed, a charity that supports parents with infant feeding issues. Erin Williams, co-founder and director of Feed, said that Iceland’s move “highlights how much flexibility there really is within the pricing of baby formula”.
Williams also said that Feed hopes that other retailers will follow Iceland’s example and offer more affordable and accessible options for parents. She said that Feed will continue to campaign for more transparency and accountability in the baby formula industry, as well as more support and education for parents.
Iceland’s customers have also expressed their appreciation and gratitude for the price cuts on social media. Many parents said that they will switch to buying baby formula from Iceland, and praised the company for standing up for consumers and challenging the industry.