Aldi dropped the price of its Mamia own-label baby formula, undercutting Iceland, the day after the frozen supermarket launched what it claimed was the “cheapest” formula available at the supermarkets, The Grocer can reveal.
Iceland executive chairman Richard Walker has been campaigning for manufacturers and retailers to lower the cost of baby formula. On Tuesday, he announced the supermarket had listed two formula products, a first infant and a follow-on milk, with SMA, which he claimed were “the cheapest on the market”. He then promoted the listing in media interviews.
Iceland’s SMA Little Steps First Infant and SMA Follow On Milk launched at £7.95 for an 800g serving, which is £1.80 cheaper than the equivalent brand at all of the big four which, along with Boots, all currently retail for £9.75. Iceland had also specifically mentioned that it was cheaper than Mamia – which is the only own-label formula brand on the market – in its press release promoting the launch.
At the time, Iceland’s product was 4p cheaper pro-rated than Aldi’s Mamia First Infant Milk, which as of 27 February, was priced at £8.99 for 900g. However, the following day, Aldi confirmed to The Grocer that it had dropped the price to £8.89 for 900g, which would be £7.90 for 800g pro rated – 5p cheaper than Iceland’s price.
Walker told The Grocer he was “delighted” to be undercut by Aldi’s own-brand. “Well done to them for stepping up quickly. We know how popular brands are in this market so let’s hope the big supermarkets and other brands are next.”
Aldi declined to comment further.
Formula prices under increased scrutiny
The SMA launch is the latest move by Iceland as part of an ongoing campaign formally launched by Walker in August calling for a loosening of restrictions that regulate how retailers sell and promote formula products.
Campaign charities have also called for manufacturers and retailers to lower the price of formula products, some of which have increased by 25% since 2021, citing concerns that the products are becoming unaffordable for families during the cost of living crisis.
Iceland had worked with manufacturers to ensure that the new SMA products were “the cheapest in the market,” Walker told Sky News’ Kay Burley in an interview earlier this week.
“We don’t make any money out of it, but it’s something that I think will be of real benefit to our customers in the cost of living crisis, and hopefully prompt other supermarkets to follow suit,” he said.
The news comes as the CMA steps up its scrutiny of formula manufacturers, with the launch of the second stage of its investigation into the category on 20 February. The market study, which will conclude in September, will look at the impact of regulation, consumer behaviour, and the role of manufacturers in making the products accessible.
“Infant formula is a key part of the weekly shop for many parents across the UK, who rely on these products to ensure their baby gets all the essential nutrients they need,” said CMA CEO Sarah Cardell.
“Whilst it’s a positive sign that prices of some products have fallen since our update last November, the cost of infant milk remains at historically high levels. We’re concerned that parents don’t always have the right information to make informed choices and that suppliers may not have strong incentives to offer infant formula at competitive prices,” Cardell added.
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