FRANCE – French dairy giant Danone is set to reduce the wholesale price of its Aptamil infant formula in the UK by 7% following an investigation by the UK’s Competition and Market Authority (CMA) into high inflation in the category.

The price cut, applicable to three ranges of Aptamil, will be implemented in UK retailer Iceland’s stores from next week.

In November, the CMA revealed that infant formula manufacturers had raised prices by 25% over the past two years.

The investigation highlighted that 85% of the baby formula market is dominated by two companies, with Danone acknowledging the challenges faced by parents due to high prices.

Danone said in a statement that it acknowledged the challenges faced by parents due to high prices.

“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’s 7% price reduction will be applicable to all its powdered Aptamil formulas sold to UK retailers, excluding liquid baby milks and any of its Cow & Gate products.

Currently, the move aims to address concerns raised by the CMA regarding unjustified price increases and the limited alternatives for consumers.

The CMA found that the baby formula market is particularly vulnerable to higher-than-inflation price rises, as parents are often hesitant to switch brands.

Only discount retailer Aldi provides its own-label alternative. Families could potentially save £500 in the first year of a baby’s life by choosing more affordable baby formula options.

Danone’s decision to lower prices aligns with efforts to ease the financial burden on families and address the criticism faced by manufacturers for “exploiting” British families.

The reduction is expected to impact retailers’ costs, providing relief to consumers facing the rising expenses associated with formula milk.

An update on the CMA’s ongoing work into baby formula is expected to be published in mid-2024. Danone’s move reflects an industry response to public and regulatory scrutiny over the pricing practices in the infant formula market.