Commerce Commission authorises infant formula code restrictions

The INC had asked the Competition Commission to authorise its code under section 58 of the Commerce Act, as restrictions on advertising and marketing may lessen competition. 

After consulting on its draft determination, the commission said it found that the code’s public benefits outweigh the likely competitive detriments.

"After considering the feedback from a number of interested parties, the commission has reached the view that the public benefits arising from higher breastfeeding rates outweigh any lessening of competition from the arrangement​," said commission chairman Dr Mark Berry. 

He added that the prices consumers pay for infant formula are unlikely to be affected.

Public benefits argument​

The INC represents the infant formula industry in Australia and New Zealand, with membership comprising manufacturers, marketers and importers of infant formula.

Its application for the authorisation of its code of practice only relates to infant formula for children under six months of age. Other milk formula products, such as follow-on formula and toddlers’ milk, do not form part of the application.

The commission may grant authorisation under section 58 of the Commerce Act for certain agreements that may otherwise breach the law. This happens when it is satisfied that the public benefits of an agreement 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.

No further restrictions​

The INC welcomed the commission’s authorisation of the code, which has been in place since 2012. It was developed by the INC in consultation with the Ministry of Health and applies to the representative body’s members who market infant formula.

However, Jan Carey, the INC’s chief executive, stressed that the code’s authorisation does not mean there will be any further restrictions on the availability of infant formula.

“There will be no change at all to the current restrictions on infant formula marketing or selling in New Zealand, or to the price promotion of infant formula​,” she said.

“I must also stress that mothers and carers still need to make sure they get sufficient information from health practitioners about formula and feeding their babies in order to make informed decisions​.”

The Code can be accessed on the INC website at infantnutritioncouncil.com​.