Restrictions on infant formula marketing extended

Commission authorises extending restrictions on infant formula marketing

Issued 8 November 2018

Commission authorises extending restrictions on infant formula marketing
The Commerce Commission has authorised members of the Infant Nutrition Council Limited to extend the advertising and marketing restrictions in their Code of Practice to cover infant formula products for children aged up to 12 months of age.

Currently, the restrictions only apply to infant formula products for children aged up to six months of age. The INC asked the Commission to authorise the extended advertising and marketing restrictions, as the extended restrictions may lessen competition.

After consulting on its draft determination, the Commission found that the public benefits of the arrangement outweigh the likely detriments from the reduction in competition.

“After taking into account submissions received from a variety of parties, and considering the relevant benefits and detriments, the Commission’s view is that the arrangement would result in public benefits, including improved public health outcomes, which are likely to outweigh the detriments arising from the lessening of competition from the arrangement. Further, the Commission does not consider that the arrangement would necessarily result in significantly higher prices for consumers,” said Chairman Dr Mark Berry.

Therefore, the Commission has authorised the extended restrictions for a period of five years. This authorisation supersedes the Commission’s 2015 authorisation, which has accordingly been revoked.

The written reasons for the decision will be published on the Commission’s website at a later date.

Background
The INC is the association for the infant formula industry in Australia and New Zealand. Its membership is comprised of manufacturers, marketers and importers of infant formula.

The INC’s authorisation application for their proposed amended Code of Practice only relates to infant formula for children aged up to 12 months of age. Other milk formula products, such as toddler milk, did not form part of the application.

The Commission’s authorisation does not limit the public’s ability to purchase infant formula or to obtain information about suitable products that may meet their needs. The public will continue to be able to obtain information on infant formula from, for example, health professionals.

Authorisation requirements
The Commission may grant authorisation under section 58 of the Commerce Act for certain arrangements that may otherwise breach the Commerce Act, if it is satisfied that the public benefits of the arrangements outweigh the detriments arising from the loss of competition. The granting of an authorisation protects the applicant from court action under the Commerce Act by the Commission and private individuals.

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