Commerce Commission authorisation to extend marketing restrictions

The Infant Nutrition Council (INC) (infant formula industry organisation) applied to the Commerce Commission to authorise an extension on the restrictions of marketing infant formula products suitable from birth to 6 months to include follow-on formula products suitable for 6–12 months.

The Commerce Commission authorised the INC to extend the advertising and marketing restrictions of formula products for infants aged up to 12 months on 8 November 2018. After consulting on its draft determination (PDF, 579 KB), the Commerce Commission found that the public benefits of the arrangement outweigh the likely detriments from the reduction in competition.

On 21 November 2018, the INC Board approved an extension of the Infant Nutrition Council’s Code of Practice for the Marketing of Infant Formula in New Zealand (INC Code of Practice) to apply to products for children up to 12 months. The updated INC Code of Practice is immediately binding on INC members.

The Ministry of Health is supportive of the INC’s application and the Commerce Commission’s determination. Inappropriate marketing of infant formula and some complementary foods, which compete with breastfeeding, can negatively affect a mother’s decision to breastfeed. Therefore, usual marketing practices are unsuitable for these products.

Key benefits arising from the authorisation include:

  • protection of breastfeeding throughout the first year of an infant’s life
  • contributes to a supportive environment that regards breastfeeding as the norm
  • prohibits infant formula companies from using sophisticated marketing techniques that can undermine a mother’s confidence to breastfeed her baby
  • is consistent with national nutrition guidelines for infant feeding in New Zealand (and Australia) which recommend that babies are fed only breast milk for around the first 6 months of life followed by continued breastfeeding, with appropriate complementary foods, until at least 1 year of age, or beyond
  • demonstrates the formula industry’s commitment to supporting the government’s public health goals of promoting, protecting and supporting breastfeeding
  • strengthens New Zealand’s implementation of the World Health Organization’s International Code of Marketing of Breast-milk Substitutes.

Background to the application

Businesses in New Zealand must comply with the Commerce Act 1986, which aims to promote competition in markets for the benefit of consumers. The Commerce Act prohibits anti-competitive agreements between companies.

The INC made an application for anti-competitive agreement authorisation so that members cannot be accused of restrictive trade practices under the Commerce Act.

In 2015 the Commerce Commission authorised the Infant Nutrition Council Code of Practice for the Marketing of Infant Formula in New Zealand under section 58 of the Commerce Act. The Commission issued the authorisation on the basis that public health benefits arising from higher breastfeeding rates outweigh any lessening of competition from the arrangement. This authorisation is for the current restriction on advertising and marketing of infant formula products suitable for 0–6 months.

Role of infant formula

The Ministry of Health recommends breastfeeding as the normal way to feed a baby because of the many benefits for the mother and baby. At the same time, the Ministry recognises that some mothers are unable or choose not to breastfeed, and that infant formula is the only safe, nutritionally complete, alternative to breast milk. Your health care practitioner is responsible for and is the best source of information and advice on infant feeding including formula feeding. For parents and caregivers who have made the decision to use infant formula, the Ministry has a resource titled Feeding Your Baby Infant Formula which provides guidance on how to use infant formula safely.

What does the authorisation mean for the Ministry of Health?

The Ministry of Health is responsible for overseeing the implementation of the World Health Organization’s International Code of Marketing of Breast-milk Substitutes and does this by administering a complaints process for dealing with Code breaches.

Authorisation of the INC Code of Practice by the Commerce Commission affects the Ministry's complaints procedure. The Ministry is now able to accept complaints about the advertising of follow-on formula suitable for infants aged 6–12 months.

The Infant Nutrition Council and the INC Code of Practice

The Infant Nutrition Council Ltd (INC) is the association for the infant formula industry in Australia and New Zealand and represents most of Australia and New Zealand’s marketers and manufacturers of infant formula. Its 36 members produce over 95% of infant formula manufactured, sold and exported in Australia and New Zealand.

The INC have their own Code of Practice for the marketing of infant formula in New Zealand. The Ministry of Health is responsible for monitoring its implementation.

Note that the INC Code only applies to infant formula manufacturers who are members of the INC. There are some infant formula companies selling infant formula in New Zealand who are not members of the INC and therefore are not party to the INC Code. The Ministry has an alternative process for responding to complaints about these non-INC companies.

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