Preliminary report on the sector inquiry on the supply of infant milk formula in the public health sector and the impact of that supply on the private retail market for : a) from birth infant formula, b) follow-on formula and c) toddler milk or other formula for the period 2013 -2019

Abstract

On 4 June 2019, the Office for Competition received a letter from one of the local suppliers of infant formula and similar products alleging that the public contract for the supply of infant formula to Mater Dei Hospital is distorting competition in the private retail market for the focal product. Breastfeeding is recognised by the World Health Organisation as the best feeding practice to nourish an infant. However, this inquiry focuses on the competition aspects of the market in cases where the parents use and purchase infant formula in the first years of their infant’s life. If, for any reason, an infant is not breastfed, then an infant formula is the only appropriate alternative milk source from the age of zero to one year. Following preliminary investigations, the Office for Competition initiated a sector inquiry on the supply of infant milk formula in the public health sector covering the 2013 – 2019 period, in terms of Article 11A (1) of the Competition Act (Cap. 379 of the Laws of Malta). The sector inquiry assessed whether the procurement process adopted by the Central Procurement and Supplies Unit is distorting competition in the secondary markets. This preliminary report presents the findings of the Office for Competition and concludes that the procurement process adopted by the Central Procurement and Supplies Unit at Mater Dei Hospital is distorting competition in the secondary market.