ACCC rejects infant formula marketing code renewal over competition concerns

AUSTRALIA – The Australian Competition and Consumer Commission (ACCC) has declined a request from the Infant Nutrition Council to extend the Marketing in Australia of Infant Formula: Manufacturers and Importers Agreement (MAIF Agreement) for another five years. 

The voluntary code, first implemented in 1992, restricts the advertising of infant formula for babies up to 12 months as part of Australia’s commitment to the World Health Organization’s guidelines.  

The ACCC’s decision is based on several concerns, including the voluntary nature of the MAIF Agreement, its limited scope, and its inability to regulate digital marketing effectively. 

The regulator stated that the agreement could lead to public detriment by reducing competition and creating barriers to market entry due to companies agreeing to limit their promotional activities and monitoring each other’s marketing practices.  

ACCC acting chair Mick Keogh said: “We are not satisfied in all the circumstances that the MAIF Agreement is likely to result in public benefits that would outweigh the public detriments likely to result from it.” 

The decision marks a shift from the ACCC’s 2021 stance, which acknowledged a balance between public benefit and detriment and recognized some positive outcomes from the agreement.  

A report by Australia’s Department of Health and Aged Care, published in April last year, found the current self-regulatory approach inadequate and recommended a stronger, mandatory framework to govern infant formula marketing. 

In line with this, the Australian government announced in October plans to introduce mandatory controls within approximately two years.  

Breastfeeding advocacy groups have also opposed the MAIF Agreement, arguing that it is ineffective in protecting breastfeeding rates and should not be authorized, even on a temporary basis. 

“While the link between breastfeeding and improved health outcomes for mothers and children is undisputed, we are concerned there are several factors that undermine the effectiveness of the MAIF Agreement in protecting breastfeeding rates.”  

The ACCC maintains that the agreement and its guidelines do not provide enough public benefit to justify authorisation and believes they contribute to reduced competition among infant formula manufacturers and importers.