Amid the Competition and Markets Authority’s (CMA) scrutiny of the infant formula market, Asda has joined Iceland, Aldi, Sainsbury’s and Tesco in rolling out a raft of further price cuts on baby milk products.
Prices on Cow & Gate, Aptamil, and SMA baby formula products have been reduced in Asda stores and online. The average decrease across these products is 6.5%, which is in addition to the series of initial reductions in January when six Aptamil lines across the core range were reduced in price by an average of 7%.
Shoppers will also be able to convert their Asda Rewards Cashpots into vouchers which can be used to purchase baby formula products following on from the move to allow these vouchers to be spent in this category for the first time at the beginning of the year.
Asda stated that it will continue to work with its suppliers to ensure that any further falls in production costs are passed on to customers.
In November last year, the CMA published the findings from its initial probe into the infant formula market. It found that prices had risen by 25% over the past two years, with evidence suggesting that some branded suppliers had increased their prices by more than their input costs. It also noted that the market was highly concentrated, with limited availability of cheaper options.
The competition watchdog announced at the end of last month that it was launching a market study that would enable it to use its compulsory information-gathering powers rather than rely on firms providing information voluntarily. Any recommendations to government resulting from its work will also now have a formal status.
The CMA has stated that it intends to conduct the study as swiftly as possible and plans to publish a final report in September this year.
NAM Implications:
- An inevitable no-brainer move for every retailer…
- (And hopefully the Aldi move will provide an own label pointer for rivals)
