BRITAIN’S competition watchdog has launched a probe into the supply of baby formula after it found that prices shot up by 25 per cent in the past two years. 

Just two firms account for 85 per cent of baby formula sales according to the Competition & Markets Authority (CMA), meaning that few parents switched as prices rose.

The CMA said that while prices of some products have fallen since November, they remain “at historically high levels.”

The watchdog found that parents could save over £500 over the first year of a baby’s life by buying cheaper formulas.

The CMA plans to produce a report in September, potentially suggesting new regulations on how formula is marketed or what information is given to parents to help them choose brands.

CMA chief executive Sarah Cardell said: “We’re concerned that parents don’t always have the right information to make informed choices and that suppliers may not have strong incentives to offer infant formula at competitive prices.”

Ms Cardell said the CMA is “determined to ensure this market is working well for the many new parents who depend on infant formula.”