A ban on baby milk price promotions should be overturned to stop parents "paying over the odds" for formula, a government watchdog has suggested.
The Competition and Markets Authority's (CMA) interim report, external on baby milk formula said the market needed a shake-up to help parents struggling to afford it.
Recommendations included the government issuing NHS-branded baby milk and removing branding from baby milk in hospitals.
It stopped short of recommending price controls, but said they remain a possibility, adding parents have been "shouldering the costs" of price increases in the market for years.
"We’re concerned that companies don’t compete strongly on price and many parents – who may be choosing infant formula in vulnerable circumstances and without clear information – opt for more expensive products, equating higher costs with better quality for their baby," said CMA chief executive Sarah Cardell.
Just three companies - Danone, which makes Aptamil and Cow & Gate, and Nestle, which makes SMA, and Kendamil - control more than 90% of the UK market.
Prices for baby formula in the UK have jumped between 18% and 36%, depending on the brand, over the two years between December 2021 and December 2023, the report found.
Parents could make a saving of up to £500 over a baby’s first year of life by switching to a lower priced brand, the report found.
“Companies are exploiting new parents who rely on formula milk to feed their babies," said Maxine Palmer from parenting charity NCT.
"With skyrocketing prices, lack of accountability, regulations and guidance in place for formula milk providers, parents are torn between the ‘best’ product to feed their baby and the essential costs of living."
The market is currently regulated so that promotions, such as loyalty points or discounts, are banned in the same way they are for tobacco and lottery tickets.
This is to encourage breastfeeding, which the NHS says is healthier for children, but the CMA said it was concerned this stopped firms competing on price, with an "unintended consequence" of this meaning "consumers paying higher prices".
Date: 20 November