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THE GOVERNMENT HAS been urged to launch an investigation into the Irish baby formula market, where prices have soared by between 18% and 22% in two years.
It comes as the Society of St Vincent de Paul told The Journal it recorded a three-fold increase in the number of callers struggling to afford formula between 2020 and 2023 to 445, with many also having difficulty with the rising price of nappies.
Labour has called on Minister for Enterprise Simon Coveney to use his powers under the Competition and Consumer Protection Act to require the consumer watchdog to investigate practices and pricing within the Irish infant formula market.
The British consumer watchdog found in November that branded suppliers of baby formula had hiked their prices more than their input costs had increased, and had maintained “high profit margins” as prices climbed 25% in two years.
Earlier this week, Britain’s Competition and Markets Authority (CMA) expanded this investigation, stating it’s concerned that suppliers may not have strong incentives to offer formula at competitive prices.
The CMA will use compulsory information gathering powers to investigate whether there are problems in its market, which like Ireland’s is overwhelmingly dominated by just two multinational firms, Danone (maker of Aptamil and Cow & Gate) and Nestlé (maker of SMA).
Now Labour wants to see Ireland’s Competition and Consumer Protection Commission (CCPC) take action too. Senator Rebecca Moynihan said it was “really disappointing” that the CCPC had so far failed to perform even “perfunctory desk analysis” on a topic that affects so many families.
“It’s one of the most shoplifted items. In some areas people are selling it door-to-door.
It’s essential food for thousands of babies.
“There’s a reason it’s security-tagged [in supermarkets]. People need infant formula,” Moynihan said.
Formula milk costs families who use it hundreds of euro over the first year of a baby’s life.
The cheapest infant formula in most Irish supermarkets – Danone’s Cow & Gate – is now retailing for €14.99 per 800g tin in several supermarkets, with Nestlé-owned competitor SMA costing €16.49. The third dominant brand in the market, Danone’s Aptamil, costs €17.49. An 800g tin would last less than a week for a fully bottle-fed baby.
The price of these brands rose between 17.8% and 22.4% over 2021-2023 according to data from consumer research firm Nielsen supplied by Nestlé. The Irish consumer price index indicates the price of “baby food” – a category that includes infant formula – increased by 7% last year, following on from a 9.4% increase in 2022.
The Vincentian MESL Research Centre keeps track of costs for nine-month-old babies and has found a 37% increase in the cost of “follow-on” milk in Ireland between 2020 and 2023, along with an 84% increase in the cost of napies. Taken together, baby formula and nappies can cost families €30-35 per week.
SVP said requests for help with infant formula were a small but increasing proportion of calls it received, at 0.2% in 2023, with families living in emergency accommodation and mothers who have recently left a situation of domestic violence among those seeking assistance with essential costs for babies.
Tricia Keilthy, Head of Social Justice at SVP said: “Breastfeeding is not an option for everyone and there are additional challenges for mothers who face poverty, housing insecurity and those who do not have a network of family support.”
In recent decades, Ireland has had one of the world’s lowest breastfeeding rates. The latest data shows only 40% of babies born in Ireland are exclusively breastfed at birth, falling to just 32% by three months, meaning a large majority of new parents depend on formula.
Babies can only consume breastmilk or formula for the first six months of life, and will continue to consume a large amount of breastmilk or formula after solid foods are introduced at six months.
After 12 months, babies can drink regular whole milk. However, infant formula companies market “growing up milk” for this age group, leading many parents to believe they need to continue to buy formula for their child. The HSE says babies over the age of 1 do not need formula milk.
CCPC responds
The CCPC said it was “actively monitoring” the British investigation and acknowledged that “the market in Ireland for the supply of infant formula shares some or many of the characteristics of the UK market”.
“The CCPC is very conscious of the impact of rising prices on consumers, and the consequences for the most vulnerable in our society,” it said.
However, both the Department of Enterprise and the CCPC stated the agency’s role in pricing lay in “ensuring that prices are set independently by competing businesses, and those prices are then prominently displayed at the point of sale thereby enabling consumers to make informed choices about which supplier offers the best value”.
“The CCPC does not, and cannot, tell businesses what prices to charge, but enforces laws that mean there is competitive pressure on businesses to set prices at a level that will attract customers. There are no limits to the prices that a trader can set and the level of profits they make as long as they do not mislead consumers,” the Department and the CCPC said.
They added that rules on the marketing of infant formula fell under the remit of the Food Safety Authority of Ireland.
The British investigation may result in recommendations to government on the regulation of how infant formula is marketed or on the information provided to parents to help them choose an infant formula brand. It has found customers are not switching to cheaper brands even as prices rise, despite them all being essentially the same due to regulations.
Nestlé and Danone respond
Nestlé said it has been “working hard to keep products affordable and accessible for parents, despite significant increases in costs, while still paying fair prices to our suppliers, including farmers”.
It did not specify what these increases in costs were when asked, beyond referencing “sustained inflation levels that are still higher than pre-Covid”.
“We have been seizing all possibilities to create operational efficiencies and absorbed increasing costs before considering responsible price increases,” Nestlé said.
Danone too said it had tried to absorb costs and minimise price increases where possible.
“We understand that rising costs have affected households across the country, with many parents facing financial challenges,” it said.
Danone reported its financial results yesterday for 2023 showing its specialised nutrition division – which includes its baby formula products – is by far its most profitable, with a margin of 20.8% globally, down from 21.6% in 2022.
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One way the govt can help: provide funding for more hands in breastfeeding support and peer to peer supports.
Second; an ad campaign about follow in milks and how they are unnecessary and of no benefit to a child’s nutrition.
Third; force companies to keep prices of formula low within specific margins
@joe: see, Joe, points 1& 2 are very valid but your third point doesn’t fly… government can’t & shouldn’t dictate or compel price fixing for any product
@Ken Mc Carthy: Yes they could. If your an ordinary joe working pay as you earn the more you earn the more tax you pay. This methodology can easily be transfered to major companies. The government could announce new temporary emergency tax rates of x percent on company profit margins who are above the European norms for industry’s who are involved in production of baby formula in the last five years. Of course FG never would. Allowing this to happen is today’s new tax on children’s shoes. They probably wouldn’t even know how to find baby formula in a supermarket.
@Ken Mc Carthy: ever heard of the agriculture industry?
@Ken Mc Carthy: they have to find a way to stop the corporates price gouging, people have to feed their babies end off, squeezing parents is immoral
@Ken Mc Carthy: what do they do with cigarettes????
@Gregory C Donoghue: don’t consider myself to be one but I’m very pro breastfeeding! Crux of the matter is that there is no tax to be made from breastfeeding …. So no investment. However there are savings to be made in the long term with the health benefits that come with breastfeeding but governments are too shortsighted to realise or want to invest.
@Gregory C Donoghue: Learn how to spell, you sap.
@joe: men arguing about forcing women to breastfeed…benefits of breastfeeding…so clueless. It’s already forced heavily on every expectant mothers and new mothers by midwives and doctors no matter what the circumstances…everyone knows it’s the best option but it’s not an option for everyone…but thanks males for your insightful views on it.
@Mairead: you assume …. Maybe I’m female? Breastfeeding isn’t an option for everyone, correct and not everyone wants to breastfeed. But plenty try and struggle with lack of support. If we could invest more in support it would help.
@Mairead: There’s always one!!!!!…… Are men not allowed to have an opinion on anything female related? I’m sure he’s sorry that he forgot to mention those that find it hard or don’t want to breast feed. But the article is about greedy formula companies squeezing extra profits, as if it’s not an extensive enough time for new parents. You don’t see fellas going off on women just because they comment on a male related issue.
@Mairead: as for the benefits of breastfeeding these are widely researched. What’s your issue with men discussing them? Surely discussion population health / health promotion isn’t gender specific? Also research states that support from partner is a huge factor when it comes to successful breastfeeding so it’s important to involve men surely!
@Ken Mc Carthy:
They set a minimum price for alcohol. Is that dictating prices?
To be fair, is this not what capitalism does?
Surprised that prices rose by 18% in two years? Rent prices rose by over 35% in three years. Look at the increase in house prices, homeownership is of a bygone generation. Capitalism is what capitalism does.
@9QRixo8H: that’s Capitalism in a nutshell, & the first foundation of Capitalism is the law of “supply & demand”. Whilst I have empathy for new parents having to endure these price hikes, it is what it is. The Labour Party can bang the table in an attempt to make themselves ‘relevant’ but the government really has no hand in what nestle ( or others) retail their products for.
@Ken Mc Carthy: the idea falls apart if there is not a healthy competitive market. This is a duopoly.
@Ken Mc Carthy: except of course when it comes to the labour market. You won’t sew wages rise 18%.
@Gregory C Donoghue: Yer ma loves ih, you sap.
@Daniel Wilson: There is no competition in the food products etc. sold in supermarkets. The majority of the world market is dominated by 7 corporations. You should really ask, what have our regulators? and governments etc. being doing to allow this to happen.
As for asking the CCPC to investigate, they only thing they would investigate is if they didn’t get paid at the end of the month.
@9QRixo8H: That’s the official line. The real first rule of capatilism is “How to manipulate the market in your favour”. Monopolize, duopolize, price fix, crush competition. Exploit workers.
@9QRixo8H: And yet housing stock increased between the last 2 census by 6% to 2.1m in total , every county saw an increase. Even unoccupied properties reduced by 16500.
Occupied property stood at just under 2m for a population of 5.2m .
Concentrate on encouraging and helping young people to have families not emigrate and replace them with immigration that would help somewhat. They have destroyed the idea of starting a family in this country mortgage,rents,cost of living is impossible even with a very good income. Which is why many either cannot afford to start a family or if they do they may emigrate and make room for immigrants well thought out as usual.
@Paddy C:
Grow up. It’s people like you that makes me ashamed to be Irish. Always having a go at foreigners.
@John Deane: I’m not blaming them I’m blaming a tick government supply is not meeting demand therefore until it does it shouldn’t be ignored and demand increased through immigration as well as current population it’s people like you who are asleep at the wheel and allowing it to worsen
@John Deane: he is just telling it as it is. Truth hurts sometimes.
Are they going to look at the price of childcare as well? No wonder birth rate is falling.
@Mike:
Falling birthrate has far more to do with education, in particular womens education.
Look at rates around the world.
We had 3 children, total spend on formula…..zero
@brian o’leary: well done. Did you breast feed them all yourself or did you let the misses give you a hand?
@James Tobin: @brian o’leary never said he breast fed his 3 kids. Odd the way you think and need to post with an attempted put down.
@James Tobin: lol… I’d say it was the other way around, on the feeding anyway.
@brian o’leary: and what if your misses weren’t able to breast feed like many women for various reasons. How would you have fed your baby’s then?
@Toyo Ke: it was a very smug post he made to put down parents that for a variety of reasons can’t breast feed and have to buy expensive formula.
@James Tobin: I guess my misses was so determined and driven that we never had to think about that.
@James Tobin: he wasn’t being a bit smug. He just stated they didn’t have to buy formula. How are people who breastfeed automatically labelled as smug if they make any sort of comment? There’s nothing smug about breastfeeding. Like most things in parenting it’s bloody hard work.
@joe: if it wasn’t a smug comment, why did he have to rub it in the faces of parents that have to pay high prices for formula that he didn’t have to pay a penny to feed his babies. Oh yes indeed he was being very smug.
@James Tobin: it’s not 60% of women who can’t breast feed, yes there are women who can’t, I persevered for a month and could no longer do it, however, a lot of the women in hospital with me made the decision not to and did not even try, apparently they were not cows so were not going to breast feed and it also meant they would have to do all the feeds!!
Interesting how many men commenting on this post. I would like to see a proper analysis of those. Sometimes I’m thinking:
What about closing comments for males?
@Karin Ahlers: When men say women shouldn’t be allowed commentate on women’s football matches, they are rightly derided as sexist.
@Karin Ahlers: everytime an issue affects women the men are straight in, a few make sense but not the majority
@Seamus Enright: Big difference between football and the menopause or breastfeeding etc…
@Seamus Enright: yea. but women really shouldn’t.
Nestlé make an annual profit of over €11,000,000,000. Their CEO gets paid over €10,000,000 annually.
Money just keeps flowing upwards, our government facilitate the process with our extremely low corporation tax levels.
Keep the babies on draught, problem solved.
One only has to look at the Nestlé baby formula scandal and report from the 1970′s to see where they stand on the high/low moral line.
Breast is best
@John Kenny: yes it is, but not every woman is physically able to breastfeed.
@Jane Gunnigan: it can be a real struggle for some women, my wife is a lactation consultant and comes across so many problems.
@John Kenny: I find parents that are able to breast feed their babies very smug to parents that are unable to for a variety of reasons.
@James Tobin: or is a perception of smugness?
@John Kenny: the breastapo is alive and well I see.
@Lin: that’s gas. Some are wanting support for women who are trying to feed in the best way possible and you attach a label that is linked to the murder of millions of Jews. Your comment is unproductive at best.
@Jane Gunnigan: or could be bothered…and yes I know this will be a very unpopular comment but there are women who won’t even consider it and dare I say women who will tell you formula is better!
If mortgate interest rates, VAT, VRT tax, etc. etc. (the list goes on) in this country then these products might be more affordable. We are robbed blind in this country and govt tries to look good by giving out about things like this which really, whilst a struggle in early years for new parents, are really a drop in the ocean and of very little benefit if cheaper.
Let’s move on to Full inquiry into Maternity Hospital errors and deaths which needs immediate investigation.
I look @Gaza and seen these unbelievable sad children and their Mothers in unjustifiable conditions in hickly piclkly housing and can’t get my head around these desperate women holding on to their beloved offspring, and we in this part of the world think we have a problem.
How in the name anyone’s God can let this go on and please feed these children.
And one day have amouthinthisWorld we know as home.
STOPTHISWARNOW.
As the numbers get higher you don’t see numbers@ the start of this inhumane conflict.
Bring the children home.
The rise in the price of Baby formula is INSANE. It was 9e a tub for my first born in 2016. Now paying as high as 22e for my third born in 2023.
The price of formula in Ireland is a disgrace, they are manufactured here and exported from Ireland for profit, if anything formula should be cheapest in Ireland. My wife did her best to breastfeed but with a poor latch our little one struggled, after many sleepless nights and following massive exhaustion we opted to use formula. It’s not fair that the current young generation who are suffering a housing crisis, cost of living crisis and some of the lowest wages for the same role in Irish history should be forced again to pay to raise their children so as to line corporation pockets.
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