The ACCC is proposing to deny the authorisation sought by the Infant Nutrition Council for an industry code which seeks to restrict the advertising and promotion of infant formula. The Commission considers that the code is no longer likely to give rise to public benefits that outweigh the likely public detriment.
The Infant Nutrition Council is seeking 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 MAIF Agreement, initially established in 1992, forms 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.
"The link between breastfeeding and improved health outcomes for mothers and children is undisputed," ACCC Deputy Chair Mick Keogh said.
"However, while the MAIF Agreement aims to protect and promote breastfeeding rates in Australia, we are concerned that there are several factors that undermine its effectiveness. This includes its voluntary nature, its limited scope, and restrictions on its ability to capture the breadth of modern digital marketing methods, such as the use of social media algorithms and content created by third-party influencers."
In 2021, manufacturers and importers were granted authorisation by the ACCC enabling them to continue implementing the MAIF Agreement for a three-year period.
The ACCC noted at that time, however, that the decision was finely balanced and that the risk of public detriment outweighing public benefit would grow should the period exceed the agreed three-year duration.
The Department of Health and Aged Care has since commissioned an independent review of the MAIF Agreement which found that it is no longer fit for purpose. The review recommended that the MAIF Agreement be replaced with a stronger regulatory framework in the form of a legislated, prescribed, mandatory code.
"Effective Government regulation of infant formula marketing would likely result in public health benefits" ACCC Deputy Chair Mick Keogh said.
The Australian Government is considering the findings of the review, though the timing and nature of its response is not yet certain.
"Given the issues undermining its effectiveness, the ACCC is not satisfied that the MAIF Agreement and associated guidelines are likely to result in a net public benefit to justify authorisation," Mr Keogh said.
The ACCC granted interim authorisation on 14 August 2024 to enable the MAIF Agreement to continue while the ACCC completes its assessment of the substantive application for authorisation. This interim authorisation remains in place while the ACCC completes its assessment.
The ACCC is seeking submissions in response to the draft determination by 17 October 2024 before making its final decision.
More information about the application, the ACCC's indicative timeline, and how to make a submission 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 its response to the MAIF Review.
For clarity, a decision not to revoke authorisation AA1000534 would effectively mean that the ACCC is not proposing to authorise the conduct again. Protection of the Conduct under the authorisation would cease shortly after the ACCC makes its final determination.
