AUSTRALIA | The ACCC has denied authorisation sought by the Infant Nutrition Council for an industry code to restrict the advertising and promotion of infant formula.
The Infant Nutrition Council sought authorisation to continue implementing the Marketing in Australia of Infant Formula: Manufacturers and Importers Agreement (MAIF Agreement) and its associated guidelines for five years.
The ACCC considered that the effectiveness of the MAIF Agreement was being undermined by several factors, including its voluntary nature, limited scope, and restrictions on its ability to capture the breadth of modern digital marketing methods.
As such, the ACCC considered that the claimed public benefits were unlikely to arise or were likely to occur with or without the MAIF Agreement. Further, the ACCC considered the conduct was likely to result in some competitive detriment.
“We are not satisfied in all the circumstances that the MAIF Agreement is likely to result in public benefits that would outweigh the public detriments likely to result from it,” said ACCC Acting Chair Mick Keogh.
The MAIF Agreement, initially established in 1992, has formed part of Australia’s response to its obligations as a signatory to the World Health Organisation’s International Code of Marketing Breast Milk Substitutes.
The MAIF Agreement is a voluntary, self-regulatory code of conduct that aims to restrict those manufacturers and importers of infant formula who opt into the agreement from advertising and promoting formula for infants up to 12 months of age.
Its implementation required ACCC authorisation as it formed an agreement between competitors not to market their infant formula products.
“While the link between breastfeeding and improved health outcomes for mothers and children is undisputed, we are concerned there are several factors that undermine the effectiveness of the MAIF Agreement in protecting breastfeeding rates.”
Keogh added that they were not satisfied that the MAIF Agreement and associated guidelines would likely result in a net public benefit to justify authorisation and considered that they were likely to result in some public detriment through reduced competition between infant formula manufacturers and importers, compared to the future without the conduct.
The Infant Nutrition Council represents most manufacturers and importers of infant formula in Australia. It had applied for revocation of the existing authorisation and the substitution of a new one to continue to make and give effect to the MAIF Agreement and its associated guidelines for a further five years to ensure a framework remained in place while the Government prepared and implemented its response to the independent review of the MAIF Agreement.
In September 2024, the ACCC announced it was proposing to deny this authorisation and sought feedback from interested parties, which raised broader health policy issues, including whether restrictions on marketing of infant formula should extend to breastmilk substitutes for children over 12 months of age and to retailers.
These issues go beyond the scope of the ACCC’s assessment of this application under competition law and are a matter for the Australian Government.
The Department of Health and Aged Care commissioned an independent review of the MAIF Agreement, which found that it is no longer fit for purpose and recommended replacing it with a stronger regulatory framework in the form of a legislated, prescribed mandatory code.
In a submission to the ACCC, the Department stated that the Government accepted this recommendation and intended to introduce a mandatory regime to restrict marketing of infant formula, which it expects would take two years to implement.
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