NZ Commerce Commission grants INC power to restrict infant formula marketing


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NZ Commerce Commission grants INC power to restrict infant formula marketing

Related tags Infant formula

The New Zealand Commerce Commission has granted infant formula industry association, the Infant Nutrition Council (INC), the power to restrict the marketing practices of its members.

Earlier today, the Commerce Commission rubber-stamped a November 2014 INC request for the authority to enforce its Code of Practice for Marketing of Infant Formula (INC Code of Practice).

The voluntary INC Code of Practice, which restricts the advertising and marketing of infant formula for children under six months of age, is signed by INC members, including Fonterra, Nestlé, Abbott Nutrition, Heinz, and Nutricia.

In its application, INC said it feared that its members, driven by the activities of non-members, would be "incentivised to increase their own marketing."

Satisfied the "public benefits outweigh the likely competitive detriments", ​the Commerce Commission today authorised the application. 

"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 Mark Berry, chairman, New Zealand Commerce Commission.

"The prices consumers pay for infant formula are unlikely to be affected,"​ Berry added.

INC welcomed the Commerce Commission ruling.

Public benefits

INC filed its application with the Commerce Commission in November 2014 under Section 58 of the New Zealand Commerce Act, which allows it to grant authorisation for restrictive trade practices.

In its application, INC said approving its request would give he New Zealand Ministry of Health more time to push through mandatory infant formula marketing legislation.

The World Health Organisation's (WHO) International Code of Marketing of Breast Milk Substitutes (WHO Code), devised in 1981 to protect and promote breastfeeding and restrict the marketing of breast milk substitutes, was adopted on a voluntary basis by New Zealand in 1983.

The New Zealand Ministry of Health is now, however, "committed to giving effect to the WHO Code,"​ said INC.

The Commerce Commission the INC request its "preliminary"​ backing on March 3 2015. It then opened the draft decision for comment until March 24.

Following a review of submissions, the Commerce Commission authorised INC's application.

"The Commerce Commission has decided to authorise the application, as it is satisfied that the public benefits that will result, or be likely to result, from the arrangement will outweigh the lessening of competition which will result, or be likely to result, from the arrangement,"​ it said.

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