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Iceland will allow customers to pay for infant formula using loyalty points and gift cards

Iceland Foods will allow customers to pay for infant formula using loyalty points and gift cards, despite current restrictions on how retailers can market the products, executive chairman Richard Walker has said.

Last week the supermarket cut the price of 14 branded lines of first and follow-on formula products. Walker then subsequently called for a change to advertising laws that mean retailers are banned from promoting price cuts on infant formula products, despite prices surging during the cost of living crisis.

On Wednesday, the supermarket launched a formal campaign urging the government to change the regulations, including to clarify rules that discourage retailers from accepting coupons and loyalty points as payment.

“You’re not allowed to use loyalty points, gift cards, food bank vouchers,” Walker told Good Morning Britain in one of several TV interviews on Wednesday morning. “I’m going to announce that we will accept – illegally – all of them today. So anyone that has got any of those can come into our shops and buy formula with it.” 

Under the Infant Formula and Follow On Formula (England) Regulations 2007 UK retailers are banned from including first formula products in promotions or advertising them in a way that’s aimed at increasing their sale.

A section of the regulation also extends to a ban on the provision of “coupons”, which has been interpreted by retailers to mean they will be in breach of the rules if they accept cash equivalents like loyalty points and food bank vouchers as forms of payment.

Read more: Retailers urged introduce more own label lines of infant formula

The rules were introduced to prevent retailers and manufacturers promoting processed formula products as being more beneficial than breastfeeding. 

However, Walker stressed that the supermarket strongly recommended breast feeding as the preferred option for parents, the move was about “supporting the choices” of parents during the cost of living crisis, he said. 

“We don’t want to price fight,” Walker said. “All I want to do, in a mutual and informative way, is communicate a permanent price reduction to our customers. That’s what we’ve done.” 

Iceland’s price reduction - which amounted to “over 20%” - counted as permanent cut rather than a promotion as it is set to remain at the new lower price until at least the end of the retailer’s financial year, Walker said. Iceland had not introduced any multibuys or bogofs on formula products, he added. 

It’s not clear if the supermarket will face any action as a result. 

As part of its formal campaign, which is in conjunction with the charity Feed and The Metro newspaper, Iceland is also calling for the government to increase the value of vouchers handed out under its Healthy Start scheme, above the maximum of £8.50.

Meanwhile in a seperate incident this week, Boots was rapped by the Advertising Standards Authority for breaching marketing regulations on infant formula products, after four paid-for adverts promoting the product appeared on Google in April.