Baby formula price cuts announced as supermarkets ramp up competition

Tesco and Aldi have announced further price cuts on baby formula as supermarkets ramp up competition on the products.

Tesco is reducing the price of 1.2kg tubs of Aptamil baby formula by £1 to £16 and 1.2kg boxes of Cow & Gate by 50p to £12, in a move it claims is making both types “cheaper per kg than any other major UK supermarket”.

Other price cuts include 800g tubs of SMA Little Steps infant formula from £9.75 to £7.95, and Cow & Gate 2 follow-on milk 800g tubs falling from £10.50 to £9.65.

Tesco chief commercial officer Ashwin Prasad said: “We’re very focused on reducing the cost of the weekly shop for our customers, and we know that it can be particularly tough for those with young families who have all those additional expenses that come with welcoming a new baby.

“That’s why, today, we have cut the prices of baby milk formula across different pack sizes and brands to help those new parents who need to buy milk formula stretch their budgets a little further.”

Aldi has lowered the price of its Mamia Infant First Formula for the second time in one week.

Customers can buy the supermarket’s own-brand product for £8.49 for 900g, maintaining it as the “lowest priced formula milk available on the market”, the discounter said.

Aldi is currently the only UK supermarket to offer own-label infant formula.

Julie Ashfield, managing director of buying at Aldi UK, said: “New parents have to make hard choices about how to spend their money, but Aldi’s Mamia range provides the best quality products for the early stages of parenting, at an unbeatable price.”

The competition watchdog launched a probe into the supply of baby formula milk late last month after it found prices had soared by 25% in the past two years.

The Competition and Markets Authority (CMA) said it has begun a market study into formula supply following findings last November of an initial review into the sector.

It said last autumn that the baby formula market was highly concentrated, with just two companies accounting for 85% of sales.

This meant few parents had switched as prices rose, with the CMA revealing infant formula prices were up by a quarter on average over two years.

It found parents could save more than £500 over the first year of a baby’s life by buying cheaper formula options.

The CMA said while prices of some products had fallen since November, they remained “at historically high levels”.

The market study will look to gather evidence on consumer behaviour, the role of regulation in the market and features of the formula market, such as barriers to entry and expansion.

The CMA plans to produce a final report in September.

If it finds there are problems in the market, it could take actions including recommending new regulations over how formula is marketed or on the information given to parents to help them choose formula brands.

In January, Asda and Tesco followed Iceland in reducing the cost of Aptamil after manufacturer Danone agreed to a 7% price cut to retailers.

Asda also said it would let customers pay for baby formula using their rewards scheme vouchers for the first time.