The ACCC has denied authorisation sought by the Infant Nutrition Council for an industry code which seeks to restrict the advertising and promotion of infant formula.
The Infant Nutrition Council sought authorisation to continue to implement the Marketing in Australia of Infant Formula: Manufacturers and Importers Agreement (MAIF Agreement) and its associated guidelines for a further five years.
The ACCC considers that the effectiveness of the MAIF Agreement is being undermined by several factors including its voluntary nature, its limited scope, and restrictions on its ability to capture the breadth of modern digital marketing methods.
As such, the ACCC considers that the claimed public benefits are unlikely to arise, or are likely to occur with or without the MAIF Agreement. Further, the ACCC considers the conduct is 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," ACCC Acting Chair Mick Keogh said.
MAIF Agreement
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 which aims to restrict those manufacturers and importers of infant formula who opt in to the agreement from advertising and promoting formula for infants up to 12 months of age. Its implementation requires ACCC authorisation as it forms 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," Mr Keogh said.
"We are not satisfied that the MAIF Agreement and associated guidelines are likely to result in a net public benefit to justify authorisation and consider that they are likely to result in some public detriment through reduced competition between infant formula manufacturers and importers, compared to the future without the conduct."
Further information on the final determination is available on the ACCC's public register at Infant Nutrition Council.
Note
ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act.
Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.
Background
The Infant Nutrition Council represents the majority of manufacturers and importers of infant formula in Australia.
The Council 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 remains in place while the Government prepares and implements 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 that it be replaced 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 intends to introduce a mandatory regime to restrict marketing of infant formula, which it expects would take two years to implement.
