Commission Proposes To Authorise The Restrictions On The Advertising And Marketing Of Infant Formula

The Commerce Commission has reached a preliminary view that it should grant authorisation to the current and future members of the Infant Nutrition Council Limited (INC) to restrict their advertising and marketing of formula products for infants aged up to 12 months old.

In assessing the INC’s most recent application (the third since 2015), the Commission has not identified any changes in the infant formula industry or in the actions of the members of the INC that will substantially impact its previous assessments of these restrictions.

“While the restrictions would likely lessen competition by limiting information available to consumers about formula products for infants aged up to 12 months old, we consider the continued authorisation of the restrictions assists with achieving important public health outcomes for parents and infants, which are supported by public health bodies and industry bodies in New Zealand,” said Associate Commissioner Sue Begg.

For these reasons, the Commission’s draft decision is that it should grant authorisation again to the INC as any reduction in competition from the restrictions is likely to be outweighed by the public benefits.

Interested parties are welcome to make submissions on the draft decision. Submissions are due by 5pm on 25 October 2023 and can be sent to registrar@comcom.govt.nz, with the reference ‘Infant Nutrition Council’ in the subject line.

Read the draft determination.

Background

The INC is a company representing the major manufacturers and marketers of infant formula and other early life nutrition products in Australia and New Zealand. The INC considers the restrictions requiring authorisation are important for New Zealand to meet its obligations under the World Health Organisation’s International Code of Marketing of Breast Milk Substitutes (WHO Code). In particular, the WHO Code aims to protect and promote breastfeeding, and to restrict the marketing of breast milk substitutes in ways that could undermine this aim.

Authorisation requirements

The Commission may grant authorisation under section 58 of the Commerce Act 1986 (the Act) for agreements that may otherwise breach the Act if it is satisfied that the agreement will in all the circumstances result, or be likely to result, in such a benefit to the public that the conduct should be permitted. The granting of an authorisation protects the applicant from court action under the Commerce Act by the Commission and private individuals.

Under section 62(1) of the Act, the Commission must prepare a draft decision before determining an application for authorisation of an agreement. The draft decision sets out the Commission’s preliminary view on whether or not we are likely to grant an authorisation, and the reasons for that view. A copy of the guidelines can be found on the Commission’s website.
 

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