(Bloomberg) -- The UK’s competition watchdog has decided not to escalate its probe into the infant formula and follow-on milk market despite finding significant concerns in the sector.
The combined effect of regulation, the behavior of manufacturers and the needs and reactions of customers are resulting in poor market outcomes, the Competition and Markets Authority said Friday. This will be best addressed by making quick recommendations rather than deepening its investigation, it added.
It will publish provisional recommendations in October.
French dairy group Danone SA and Swiss food giant Nestle SA dominate the formula market in the UK, with more than 80% market share.
The CMA said last November that it was undertaking a market study. The formula market is high-margin with a small number of brands and few own-label alternatives. Unlike many other consumer products, shoppers often have no choice but to buy formula.
According to a CMA analysis, the price of branded formula rose 24% from September 2021 to September 2023, while own-label jumped up 45%. The CMA was looking to better understand consumer behavior in the sector, as well as barriers to entry for manufacturers and the role of regulation.
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