Supermarkets are being urged to pass on price cuts after the maker of Aptamil reduced the cost of its formula baby milk by 7 per cent.
The move by Danone follows a damning report from watchdogs which found that the cost of baby formula has risen more quickly than industry costs.
Average prices have surged 25 per cent in two years causing massive hardship for young parents struggling to make ends meet during the cost of living crisis.
There are reports of people watering down formula, using unhealthy alternatives, and even turning to shoplifting and the black market to feed their babies.
The 7 per cent price cut announced by Danone applies to some products in its more expensive Aptamil range, but do not include its Cow & Gate brand.
Other manufacturers, including Nestle, which owns SMA, Kendamil and Hipp, are under pressure to follow suit.
The maker of Aptamil revealed a 7 per cent cut in the price of its formula baby milk following concern from the regulator
The price cut announced by Danone applies to some products in its more expensive Aptamil range, but do not include its Cow & Gate brand
Importantly, while Danone and other manufacturers may cut the price they charge retailers, it will be up to the stores whether to pass this on.
Last year, the Competition & Markets Authority signalled it was concerned that manufacturers may be taking advantage of a desire by parents to give babies the best start, which means buying an expensive big brand rather than a cheaper alternative.
It said: ‘The prices for baby formula in the UK have risen by 25 per cent over the past two years.
‘Evidence suggests that branded suppliers of baby formula have… increased their prices by more than their input costs.
‘On top of this, the market is highly concentrated (two firms have around 85 per cent of the market share) and brands have maintained high profit margins over the last two years.
‘There is little evidence of parents switching to cheaper branded options as prices have risen and very limited availability of own-brand alternatives.’
It added: ‘Families could make significant savings of more than £500 over the first year of a baby’s life, through buying cheaper baby formula options.’
The boss of Iceland, Richard Walker, who has been campaigning to highlight baby formula rip-offs, confirmed his chain will be passing on the price fall announced by Danone.
Three ranges of Aptamil will be reduced from £12 to £11.20 in Iceland stores from next week. These are the 800g products: Aptamil First Infant Milk, Aptamil Growing Up Milk, and Aptamil Follow-on Milk.
Last year, the Competition & Markets Authority signalled it was concerned that manufacturers may be taking advantage of a desire by parents to give babies the best start, which means buying an expensive big brand rather than a cheaper alternative (Pictured: A seven-month-old baby drinks formula milk)
Mr Walker said it is only right that manufacturers and supermarkets reduce the price of the formula products. However, he pointed out that one manufacturer, Kendamil, has recently increased its prices to retailers.
Mr Walker said: ‘All the brands need to do the right thing and recognise there is a cost of living crisis and drop their prices as soon as possible so that we in turn can do the same.’
Retailers can reduce prices, however they are legally banned from promoting any reductions because there are concerns this would encourage mothers to switch away from breast feeding.
Mr Walker said: ‘While we support breastfeeding as the most beneficial way of feeding infants, the millions of families who rely on formula need more support for their choice or circumstances.’
Iceland has called on the government to review Healthy Start vouchers, which are worth £8.50 a week for babies up to one year old.
These vouchers have not been increased in value since April 2021 and have fallen below the price of the cheapest formula after recent increases.
Danone said it recognised the challenges faced by parents due to inflation.
It said: ‘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.’