ONE of the biggest makers of baby milk formula is cutting its prices after the competition watchdog accused it of ripping off hard-pressed families.
French firm Danone said yesterday it would be lowering the price of its Aptamil formula brand by 7 per cent.
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It comes after research last year showed baby formula prices had surged by 24 per cent over the last two years while the cheapest brand, Mamia sold by Aldi, had increased by 45 per cent.
Danone, the £35billion French company, has a tight grip on the baby formula market, splitting 71 per cent of every sale with rival Nestlé.
When asked if it would be lowering prices, a Nestlé spokesman said: “We have been working hard to keep products affordable for parents”.
The soaring increase has hit struggling families hard and means the cheapest tin of baby milk is unaffordable as Healthy Start vouchers are capped at £8.50.
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The price of an 800g Aptamil tub is currently £14.50, according to First Steps Nutrition.
Danone’s price cuts will take place next week but will not include its cheaper Cow & Gate formula range.
Retailers are banned from offering discounts and loyalty points on baby formula, due to legislation designed to promote breastfeeding.
This is despite NHS figures showing 75 per cent of parents use formula at some point in the first eight weeks of a baby’s life.
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Richard Walker, boss of Iceland who has campaigned on the price of formula, said: “This reduction will really help struggling families.
“We’re passing on all of the saving that we’re getting from Aptamil, straight on to our customers down to £11.20.”
But Mr Walker accused rival Kendamil of “giving us a price increase”.
Will McMahon, director at Kendamil, hit back and said that its £9.25 formula was still £9 cheaper than Aptamil Advance and £2.50 cheaper than their formula.
He said: “Kendamil consistently increased prices by less than the industry average.
“We challenge the foreign conglomerates like Danone to explain to UK parents why — with all their profits, pricing power and economies of scale — they cannot price match a smaller, premium UK-made brand”.
In November, the Competition and Markets Authority flagged there was weak competition in the market and prices were being hiked above inflation, with food companies’ profits rising.
The watchdog said: “Infant formula is an essential, non-substitutable product, and there have been concerning reports of struggling consumers who are resorting to shoplifting or buying it on the black market.”
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Andrew Bailey, Bank of England governor, said “further global shocks” were the main threat to the UK economy with shipping disruptions caused by Houthi rebels in the Red Sea being a concern.
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It will pay an initial £89million in cash with the rest of the sum covering the debts.
Last year South West Water, which Pennon owns, was fined £2.1million for pollution offences.
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Less than £1billion was raised by firms in total, according to EY. In contrast companies in the US raised £17billion.
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THE GYM GROUP, which styles itself as the “easyJet of gyms”, said that more people were sticking with their fitness routines as average visits per person rose by 9 per cent last year.
Gyms traditionally enjoy their busiest time of year in January as New Year resolutions drive people through their doors — unlike other firms which tend to suffer a quiet Christmas hangover.
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The company, which has 233 sites, said sales rose 18 per cent to £204million last year, helped by an 8 per cent increase in membership to 872,000.
It is planning to unveil 12 further sites this year, which will be open 24/7.
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SAINSBURY’S lured Christmas food shoppers from Aldi and Waitrose — but sales fell at Argos.
Grocery sales at the supermarket rose by 8.6 per cent in the six weeks to Christmas.
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Sainsbury boss Simon Roberts said it had grown “sales volumes ahead of Aldi for the first time ever” after lowering prices and promoting its bargain Christmas roast dinner.
And he added its premium Taste the Difference range had its best year yet.
However Sainsbury’s shares fell by 6.3 per cent yesterday to 286.5p as investors had hoped for a profit upgrade.
Meanwhile Argos sales dropped 4.2 per cent.
It blamed tough comparisons with the previous year when shoppers switched in droves to its click and collect service amid postal strikes.
Analysts said its non-food business remained more vulnerable to the weak consumer environment.
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PERSIMMON built a third fewer homes last year amid soaring building costs and waning demand from buyers.
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Despite building 9,922 homes in 2023 compared to 14,868 in 2022 it still squeezed a 5 per cent increase on the average selling price of a home at £285,770.
Boss Dean Finch said that market conditions this year would be “highly uncertain, particularly for first-time buyers and with an election likely”.
