Danone to cut its baby formula prices by 7%


Danone will cut the wholesale price of its Aptamil infant formula by 7% in the UK from Monday, after the country’s antitrust regulator launched a probe into rising prices in the market.

The French company’s price cut will only apply to its powdered Aptamil formulas sold in UK shops, but not liquid milks or its other brand Cow & Gate, a spokesperson for the company said.

In late November, Britain’s Competition and Markets Authority said it would review the price of infant formula after it found that consumers were choosing more expensive branded options. Prices for baby formula in the UK have risen by 25% over the past two years, the regulator said, and 85% of the baby formula market is dominated by two companies. Danone has a market share of around 70%.

Formula production is heavily regulated to ensure babies receive adequate and safe nutrition, meaning there is little difference between brands. 

When the investigation was launched, a Danone spokesperson said the company had “worked very hard” to absorb the cost increases as well as “make savings, and minimize any price increases.” At the time, a spokesperson declined to explain why its Cow and Gate first milk costs £10.50 ($13.35) per 800 grams while Aptamil is £14.50.

Britain’s regulator said its review will allow it to better understand consumer behavior, barriers to entry and expansion for formula makers as well as whether any regulatory changes are required. It plans to publish an update in mid-2024.

Consumer goods companies and retailers have come under political pressure across Europe to stem rising prices in the past year and faced accusations of profiteering. The tension has led to some disputes between grocers and manufacturers, with France’s Carrefour recently removing PepsiCo Inc. products from its shelves over a pricing row

Subscribe to the new Fortune CEO Weekly Europe newsletter to get corner office insights on the biggest business stories in Europe. Sign up for free.

Source link

You may also like