Iceland reduces cost of baby formula after 7% price cut by Danone

Supermarket Iceland is to cut the cost of Aptamil infant formula after manufacturer Danone agreed to a 7% price cut to retailers across the market.

The supermarket will sell three 800g Aptamil lines – Aptamil 800g First Infant Milk, Aptamil 800g Growing Up Milk, and Aptamil 800g Follow-on Milk – for £11.20 from January 16, a reduction from the “already market-leading” £12, it said.

It follows Danone agreeing to reduce the price it offers its Aptamil powdered formula to retailers by up to 7%.

Retailers, not Danone, set the shelf price of the products, but it is expected that other supermarkets will follow Iceland’s lead.

Last month, the Competition and Markets Authority (CMA) said formula prices had risen by a quarter over the past two years.

The CMA is investigating the baby formula market after finding it was vulnerable to higher than inflation price rises. Only one UK retailer, Aldi, sells its own brand.

The regulator found competition was hampered because shoppers were reluctant to switch brands, either because they were recommended by friends and family or because their baby would drink only one.

New parents could make significant savings of £500 in the first year of a baby’s life on formula milk products by shopping around, the CMA added.

Last year Iceland’s own research suggested 86% of new parents were concerned about how to afford to feed their non-breastfed babies.

Iceland executive chairman Richard Walker said: “I welcome Danone’s move to reduce the price of Aptamil across the market and it’s only right we again reduce the price even further at Iceland.

“It’s important, however, that this doesn’t gloss over the actions which are still urgently needed to support families.

“While we support breastfeeding as the most beneficial way of feeding infants, the millions of families who rely on formula need more support for their choice or circumstances and simply reducing the price won’t solve the systemic issues we’ve drawn attention to.

“2024 is going to be another tough year for families and we need immediate changes to the law to allow retailers to tell customers when they have reduced the price of formula and customers must be allowed to buy formula with loyalty points, gift cards or food bank vouchers.”

Iceland has also called on the government to review Healthy Start vouchers, which are currently worth £8.50 per week for babies up to age one.

The vouchers have not increased in value since April 2021, and they now do not cover the cost of even the cheapest formula after recent price increases.

Dr Erin Williams, co-founder and director of Feed, said: “Whilst it’s a welcome move, Danone’s infant formula price reduction is by no means a solution to the wider issues facing families struggling to access infant formula, and it remains critical that the UK Government to commit to addressing this at a higher level.

“This includes an increase to the value of Healthy Start vouchers which, despite this price reduction, still don’t cover the cost of a tub of formula.

“It means reviewing the laws and guidance that restrict families’ access to infant formula, and it means continuing to press Danone, and other formula companies, to reverse the exorbitant price increases families have had to endure over the last couple of years.

“We commend Richard Walker and the Iceland team for their continued commitment to support families by offering further formula price reductions and cash equivalent payment methods, and we urge other retailers to follow suit.

“Our research shows that when families are unable to afford infant formula, they are forced into unsafe infant feeding practices, like watering down formula and skipping feeds, so it is critical that this price reduction is the first step of many towards addressing the bigger issues facing the many families who are struggling to feed their babies.”