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The UK’s Competition and Markets Authority has today launched a market study into the supply of infant formula in the UK after finding prices had soared by 25% over two years.

The launch of a market study means the CMA will be able to use its compulsory information gathering powers, rather than rely on firms providing information voluntarily.

The CMA said it intends to conduct the market study as swiftly as possible and with the intent of publishing a final report in September 2024.

The study will examine:

  • Consumer behaviour, the drivers of choice, and the information and advice available to consumers to support their decisions,
  • The role of the regulatory framework and its enforcement in influencing market outcomes
  • The supply-side features of the market (such as barriers to entry and expansion)

Following this, the body will consider whether there are problems in the market and, if so, what actions could or should be taken to address these.

This could include making recommendations to government – for example, on the regulations governing how infant formula is marketed, or on the information provided to parents to help them choose an infant formula brand.

Today’s update follows the CMA’s Autumn 2023 report into price inflation and competition in the Groceries sector, which found that the average price of infant formula had risen by 25% over the previous 2 years and that families could make significant savings of more than £500 over the first year of a baby’s life, through buying cheaper infant formula options.

Sarah Cardell, CEO of the CMA, said: “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.

“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.

“We are determined to ensure this market is working well for the many new parents who depend on infant formula and it’s essential that any changes we propose are based on evidence and a strong understanding of the market. That’s why we’ve now decided to take forward our work on infant formula as a market study, using our formal legal powers.”

Morning update

Diageo has appointed Julie Brown as a non-executive Director, effective 5 August 2024.

On appointment, Julie will succeed Alan Stewart as chair of the audit committee, who will retire from the board immediately prior to Diageo’s AGM in September 2024.

Brown has been CFO and executive director of GSK plc since 1 May 2023, prior to which she served as chief operating and financial officer and executive director, Burberry Group between 2017 and 2023.

She has also served as group CFO of Smith & Nephew from 2013 to 2017 having previously worked for 25 years at AstraZeneca in various finance, commercial and strategic roles including as regional and country president and latterly as interim group CFO.

Diageo chairman, Javier Ferrán, said: “I am delighted that Julie will be joining the Board and succeeding Alan as Chair of the Audit Committee in August. Julie brings many years of experience in financial, commercial and strategic roles in international companies operating in highly regulated industries. She is strongly committed to enabling diversity in business and to creating sustainable, long-term value for stakeholders. I look forward to her contribution to Board discussions and to working with her in progressing Diageo’s ambition to be one of the most trusted and respected consumer products companies in the world.

“On behalf of the Board, I would like to thank Alan Stewart who has been a Director since 2014 and Chair of the Audit Committee since 2017. Alan has served Diageo with great distinction during this period, and we have benefitted greatly from his expertise and strategic input. We wish him the very best for the future.”

On the markets this morning, the FTSE 100 is fractionally up at 7,733.7pts.

Early risers include Domino’s Pizza Group, up 4.2% to 361.4p, Glanbia, up 2% to €15.49 and SSP Group, up 0.7% to 227p.

Fallers include Just Eat, down 2% to 1,259p, C&C Group, down 1.6% to 152.2p and Bakkavor, down 1.5% to 93.2p.

Yesterday in the City

The FTSE 100 closed up 0.2% yesterday at 7,728.5pts.

Risers included Kerry Group, up 2% to €79.00 Greencore Group, up 2% to 104.5p, Deliveroo, up 1.8% to 119.1p, Coca-Cola Europacifici Partners, up 1.6% to €63.00 and Cranswick, up 1.4% to 3,982p.

Fallers included Glanbia, down 4.5% to €15.19, THG, down 4.1% to 64.5p, Nichols, down 3.7% to 974p, Just Eat, down 1.8% to 1,284p and British American Tobacco, down 1.8% to 2,369.5p.