WHO calls for clampdown on baby formula milk manufacturers ‘exploiting’ UK families

Published

1 year ago

November 13, 2023

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The World Health Organisation (WHO) wants government action over escalating baby formula prices that are “exploiting” British families.

In an interview with Sky News, WHO called out the “profit-driven” multinational manufacturers for “manipulating the price” of their baby formulas.

The most recent research shows prices in the UK have risen 24% over the past two years, while the cheapest brand has jumped by 45% in that time.

WHO has urged governments to intervene on behalf of struggling families and find a way of reducing the prices in the shops.

In May, Sky News uncovered the desperate measures many parents are taking to feed their babies including stealing formula, buying on the black market, watering down bottles or substituting formula for condensed milk.

WHO technical officer, Laurence Grummer-Strawn, told Sky News: “It is shocking to be seeing a high income country like the UK facing these kinds of problems where mothers can’t afford to feed their babies.”

When asked if it amounted to exploitation, Mr Grummer-Strawn said: “Yes, I think we can say that when you see that these prices are being driven down to the consumers and having to pay extremely high prices.

“They’re in a very vulnerable situation, that they have infants that have to be fed and there aren’t many alternatives out there for them and there aren’t really other companies they can turn to.

“You’re exploiting them to increase the profits of these companies, and they have huge profit margins.”

Speaking about solutions, Mr Grummer-Strawn explained: “We really need government action to address either on the price end or in ways to help those families directly.”

“Lowering the prices can help these families, but it needs to be in a sustainable way,” he added.

“We have to have government action. To be setting up a situation where people are dependent on these baby banks and food banks to be providing this, that’s not a sustainable way for families to get what they need.”

Baby banks and food banks across the UK have reported a surge in families in need of help – often parents who are in work but are still struggling to afford formula milk and other essentials.

Last month Sky News reported on the rationing that many baby banks said they are now having to introduce because they don’t have enough donated formula to distribute to all those who need it.

Many of the charities have said they are worried the workload is unsustainable.

Mr Grummer-Strawn added: “I think that what we’re seeing here is largely companies taking advantage of opportunities that other things are getting more expensive, so let’s make ours more expensive as well.

“Our concern is that they’re out to maximise their profits.

“And from a business perspective, and their shareholders, maybe that’s what their shareholders want. They want the highest profit.

“We’re certainly trying to find ways to reach out to investors and say, ‘you know, where’s the ethics in this?’, and try to get investors to think about investing in an ethical way and therefore either don’t invest it in these companies, or choose the companies that are making the most ethical decisions and tell them about the harms of the way that these products are being marketed, the way the prices are being manipulated.”

Mr Grummer-Strawn added: “At the heart of this are families simply trying to keep their babies fed when, for whatever reason, their child relies on bottle feeding.

“We really want to make sure we’re not making mothers feel guilty. This is not their fault.”

The problem is, he added, “that the government hasn’t stepped up and supported them in ways that they need to”.

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While most of the main manufacturers did not respond directly when Sky News put WHO’s comments to them, they have all told us higher production costs are the reason for the price rises.

Danone, which makes the Aptamil and Cow & Gate brands, did respond to say it is facing “unprecedented increases in the cost of ingredients, manufacturing, storage and transport”.

A spokesperson said: “Where possible we have always tried to absorb as many of these cost increases as possible.”

Danone added that it does try to help parents but added: “Ultimately, individual retailers set the selling price in their stores for all products.”

Westminster officials have consistently told Sky News that the government is helping with the cost of living but did not respond to WHO’s concerns.

Business

Cineworld owners screen plan for stock market comeback in New York

Published

18 hours ago

November 17, 2024

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Cineworld owners screen plan for stock market comeback in New York

Cineworld’s hedge fund backers are drawing up plans to return the cinema operator to the public markets amid continuing uncertainty about the future of dozens of its British sites.

Sky News has learnt that the company’s owners are at the early stages of considering a New York listing for the business, with the first half of 2026 considered a likely window for it to take place.

City insiders said that a flotation was likely to encompass Cineworld’s operations outside the UK, with the group’s board expected to consider a sale of the British operations at some point.

They cautioned, however, that no decisions had been reached and would not be for some time.

The fate of Cineworld’s business in the UK has been mired in uncertainty for months, with the company initially exploring a sale of it before turning to a restructuring plan which compromises many of its landlords and other creditors.

It has announced the permanent closure of six sites, but it emerged last month that nearly 20 more were at risk of being shut amid ongoing talks with property owners.

The restructuring plan is due to complete later this month, which some landlords have opposed over the fairness of its terms.

Documents circulated as part of the restructuring plan process highlighted the fact that the company did not have sufficient funding to meet a quarterly rent bill on June 24 of £15.9m.

“Absent this funding, the UK Group would have been insolvent on a cashflow basis,” they said.

Other cinema operators, such as Odeon, are now poised to step in to take over small numbers of Cineworld’s other sites.

The company trades from more than 100 locations in Britain, including at the Picturehouse chain, and employs thousands of people.

Cineworld grew under the leadership of the Greidinger family into a global giant of the industry, acquiring chains including Regal in the US in 2018 and the British company of the same name four years earlier.

Its multibillion-dollar debt mountain led it into crisis, though, and forced the company into Chapter 11 bankruptcy protection in 2022.

It delisted from the London Stock Exchange in August 2023, having seen its share price collapse.

In addition to the UK, Cineworld also operates in central and Eastern Europe, Israel and the US.

Cineworld has been contacted for comment.

Business

Former Tory minister Heaton-Harris eyes top job at football regulator

Published

2 days ago

November 16, 2024

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Former Tory minister Heaton-Harris eyes top job at football regulator

A former Conservative cabinet minister has thrown his hat into the ring to become the inaugural chair of Britain’s new independent football regulator.

Sky News has learnt that Chris Heaton-Harris, who stood down as an MP at July’s general election, is among those who applied for the role ahead of a deadline on Friday.

Mr Heaton-Harris is himself a qualified football referee who has officiated at matches for decades.

A former Northern Ireland secretary and chief whip under Rishi Sunak and Boris Johnson respectively, he said in 2022 of his part-time career as a football official: “I took a [refereeing] course and that was it, I’ve been going ever since.

“Football has done wonders for me throughout my life so I would recommend it to everybody.”

Mr Heaton-Harris is among a large number of people who have applied for the role of chair at the Independent Football Regulator (IFR), according to officials.

A publicly available timetable for the search says that interviews for the £130,000-a-year post will end on 11 December, with an appointment expected in the new year.

It is the second time that the government has embarked on a search for a chair for the IFR after an earlier hunt was curtailed by the general election.

The role will be based at the watchdog’s new headquarters in Manchester and will require a three-day-a-week commitment.

The Football Governance Bill had its second reading in the House of Lords this week, as part of a process that will represent the most fundamental shake-up in the oversight of English football in the game’s history.

The Labour administration has dropped a previous stipulation that the regulator should have regard to British foreign and trade policy when determining the appropriateness of a new club owner.

The IFR will monitor clubs’ adherence to rules requiring them to listen to fans’ views on issues including ticket pricing, while it may also have oversight of the parachute payments made to clubs in the years after their relegation from the Premier League.

The top flight has issued a statement expressing reservations about the regulator’s remit, while it has been broadly welcomed by the English Football League.

The IFR’s creation will come with the Premier League embroiled in a civil war over Manchester City‘s legal battles emanating from allegations that it breached the competition’s financial rules.

Next week, the 20 Premier League clubs will meet for a lengthy shareholder meeting, with a vote on amended Associated Party Transaction rules hanging in the balance.

The league needs 14 clubs to vote in favour for the rule changes to be passed.

Contrary to earlier expectations, however, a detailed discussion on a financial distribution agreement between the Premier League and EFL is unlikely to be on the agenda.

A Department for Culture, Media and Sport spokesperson said: “The process for recruiting the Independent Football Regulator chair is under way but no appointment decisions have been made.

“We do not comment on speculation.”

This weekend, Mr Heaton-Harris could not be reached for comment.

Business

Pizza Hut UK hunts buyer amid Budget tax hike crisis

Published

2 days ago

November 16, 2024

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Pizza Hut UK hunts buyer amid Budget tax hike crisis

Pizza Hut’s biggest UK franchisee has begun approaching potential bidders as it scrambles to mitigate the looming impact of tax hikes announced in last month’s Budget.

Sky News has learnt that Heart With Smart (HWS), which operates roughly 140 Pizza Hut dine-in restaurants, has instructed advisers to find a buyer or raise tens of millions of pounds in external funding.

City sources said this weekend that the process, which is being handled by Interpath Advisory, had got under way in recent days and was expected to result in a transaction taking place in the next few months.

HWS, which was previously called Pizza Hut Restaurants, employs about 3,000 people, making it one of the most significant businesses in Britain’s casual dining industry.

It is owned by a combination of Pricoa and the company’s management, led by chief executive Jens Hofma.

They led a management buyout reportedly worth £100m in 2018, with the business having previously owned by Rutland Partners, a private equity firm.

One source suggested that as well as the talks with external third parties, it remained possible that a financing solution could be reached with its existing backers.

HWS licenses the Pizza Hut name from Yum! Brands, the American food giant which also owns KFC.

Insiders suggested that the increases to the national living wage and employers’ national insurance contributions (NICs) unveiled by Rachel Reeves would add approximately £4m to HWS’s annual costs – equivalent to more than half of last year’s earnings before interest, tax, depreciation and amortisation.

One added that the Pizza Hut restaurants’ operation needed additional funding to mitigate the impact of the Budget and put the business on a sustainable financial footing.

The consequences of a failure to find a buyer or new investment were unclear on Saturday, although the emergence of the process comes amid increasingly bleak warnings from across the hospitality industry.

Last weekend, Sky News revealed that a letter co-ordinated by the trade body UK Hospitality and signed by scores of industry chiefs – including Mr Hofma – told the chancellor that left unaddressed, her Budget tax hikes would result in job losses and business closures within a year.

It also said that the scope for pubs and restaurants to pass on the tax rises in the form of higher prices was limited because of weaker consumer spending power.

That was followed by a similar letter drafted by the British Retail Consortium this week which also warned of rising unemployment across the industry, underlining the Budget backlash from large swathes of the UK economy.

Even before the Budget, hospitality operators were feeling significant pressure, with TGI Fridays collapsing into administration before being sold to a consortium of Breal Capital and Calveton.

Sky News recently revealed that Pizza Express had hired investment bankers to advise on a debt refinancing.

HWS operates all of Pizza Hut’s dine-in restaurants in Britain, but has no involvement with its large number of delivery outlets, which are run by individual franchisees.

Accounts filed at Companies House for HWS4 for the period from 5 December 2022 to 3 December 2023 show that it completed a restructuring of its debt under which its lenders agreed to suspend repayments of some of its borrowings until November next year.

The terms of the same facilities were also extended to September 2027, while it also signed a new 10-year Pizza Hut franchise agreement with Yum Brands which expires in 2032.

“Whilst market conditions have improved noticeably since 2022, consumers remain challenged by higher-than-average levels of inflation, high mortgage costs and slow growth in the economy,” the accounts said.

It added: “The costs of business remain challenging.”

Pizza Hut opened its first UK restaurant in the early 1970s and expanded rapidly over the following 15 years.

In 2020, the company announced that it was closing dozens of restaurants, with the loss of hundreds of jobs, through a company voluntary arrangement (CVA).

At that time, it operated more than 240 sites across the UK.

Mr Hofma and Interpath both declined to comment.