Cost of living: Shoppers ‘overcharged’ for branded goods including baby formula and baked beans, watchdog finds
Suppliers of branded goods including baked beans and pet food have “pushed up prices by more than their costs”, according to the competition watchdog.
The Competition and Markets Authority (CMA) has been examining 10 product categories in a bid to see if shoppers, already struggling amid the continuing cost of living crisis, are being ripped off.
It said that while some increases were justified, to cover rising costs from elements such as energy and ingredients, there was clearly some profiteering – a finding the consumer group Which? described as “shocking”.
“The evidence collected by the CMA indicates that, over the last two years, around three-quarters of branded suppliers in products such as infant formula, baked beans, mayonnaise, and pet food – have increased their unit profitability and, in doing so, have contributed to higher food price inflation“, the regulator’s statement said.
It went on to explain, however, that the shifts were likely to have backfired somewhat as shoppers had clearly switched to cheaper, supermarket own brand, alternatives in a bid to save cash.
The regulator will hope that the competition will help prices of branded goods come down.
But brands told the inquiry that when their costs started to fall they would offer promotions to customers, rather than cut the standard costs of their products.
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‘This cannot carry on’
The CMA said that more study was needed, including in the baby formula sphere that has been the subject of work by Sky News and seen the World Health Organisation declare that families were being “exploited”.
However, it did find evidence of unjustified price increases, with costs to consumers up by 25% over two years, and cited concern that two companies, Danone and Nestle, control 85% of the market.
Calls for baby formula price cap will rise
By laying out the simple fact that the formula milk price rises parents face in the shops do not equate with the “input costs” of making the product, the CMA is putting the formula industry firmly in the spotlight.
It’s already being called out as profiteering by campaigners, but the regulator is now singling out the formula industry for further interrogation.
It says quite clearly: “Evidence suggests that branded suppliers of baby formula have also increased their prices by more than their input costs.”
This year Sky News has tracked the desperate measures some families are having to take to feed their babies – it’s upsetting, stressful and ultimately unsafe for babies.
Experts have warned the high prices have put the nation on the brink of a “public health crisis” and earlier this month the World Health Organisation told Sky News that families were being “exploited” on pricing.
The CMA also highlights that the formula milk market is different to other food products – it is dominated by two multinational manufacturers – and that the public health messaging around it needs improvement for parents.
All the brands on the market meet minimum nutritional standards. Whether you buy the cheapest brand from Aldi for just under £10 or the most expensive at nearer £20.
The next stage of the CMA’s work will take months, but it appears determined to establish what needs to change. The calls for a price cap are only likely to increase.
A spokesperson for Danone UK & Ireland, the makers of the Cow & Gate and Aptamil brands, said it had minimised price increases and launched smaller, lower-priced pack sizes to help parents’ budgets.
“In Danone’s experience the formula milk market is competitive. We are committed to best practices to maintain this and will work constructively on ways we can continue to deliver value and innovation to parents. We will also continue to engage with the CMA over the coming months,” they said in a statement.
A Nestle spokesperson told Sky News: “Our goal has always been to keep products affordable and accessible for parents while still paying fair prices to our suppliers, including farmers.
“There have been significant increases in costs but we have been working to cut our costs wherever possible and only increase prices as a last resort.”
The CMA also declared that it was going to review supermarket loyalty schemes in the next phase of its investigation.
Front and centre of that is the offering of promotions only to customers who sign up to their loyalty cards.
The industry group for manufacturers responded to the CMA’s conclusions by suggesting that the pricing reflected value.
Karen Betts, chief executive of The Food and Drink Federation said: “Across our sector margins are at a 40-year low, insolvencies have doubled and investment has dropped by more than a third.
“Shoppers in the UK can take some comfort from the fact that, even with the levels of inflation we’ve seen in recent months, food and drink prices here remain lower than average EU grocery prices.
“The UK grocery market is highly competitive and offers a wide choice of products at a range of prices.
“Where branded products are more expensive than own-brand, this is because of the constant investment in quality and innovation that brand-owners make.
“If that investment doesn’t happen here in the UK, the amount of imported food and drink will certainly go up – with consequences for jobs, competitiveness and food security.”
But Sue Davies, head of food policy at Which?, said of the CMA’s findings: “Its evidence reinforces Which?’s concerns that shoppers relying on convenience store branches of the big supermarkets, which rarely stock the cheapest own-brand ranges, may struggle to find more affordable food.”
She added: “It’s positive that the CMA is set to review supermarket loyalty pricing as a recent Which? investigation found these deals aren’t always as they seem.
“In September we asked the regulator to look at whether supermarkets could be hiking ‘regular’ prices to make it appear that loyalty scheme customers are getting a better deal than they really are.”
The regulator issued its update after previously finding that higher prices in stores were not the result of weak competition between supermarket chains.
The watchdog did, however, demand tighter rules over so-called unit pricing – costs per item covering versions of the same product – to bolster price transparency.
It also previously found that supermarket fuel operators had charged motorists an extra £900m in 2022 by raising their margins on both petrol and diesel sales.
Victims of grooming gangs and modern slavery are being denied compensation by a government scheme because of their criminal records, Sky News has learned.
Analysis of official figures by Sky News’ Data & Forensics team shows more than 11,000 victims of crime over the last decade have been denied payouts because of their unspent convictions, including children.
The Criminal Injuries Compensation Authority can award money to victims of violent crime, including sexual abuse.
It is the only government compensation scheme for victims – for those unable to work due to injuries, the money can be vital.
But, if an applicant has a criminal record, they are automatically refused compensation with limited exceptions.
Those with unspent convictions sometimes receive reduced sums.
Sky News has found that at least 130 children with criminal records have received reduced awards over the last 10 years, including 50 victims of sex abuse, four victims of brain damage, and one child who lost sight in an eye.
This rule on unspent convictions is based on the idea that public funds should only compensate blameless victims of crime and not, for example, a gang member who was injured in a fight.
But many argue the policy punishes those who have been forced to offend by exploiters, as well as victims of child sexual abuse.
‘I was frustrated that I wasn’t being believed’
Arthur Sherry, 43, from Perranporth in Cornwall was regularly abused by his babysitter from the age of five, including suffering rape.
In 2008, he reported it to Devon and Cornwall Police, alongside two other victims. He alleges the police did not believe him, and charges were not brought against his abuser.
Arthur Sherry, who was abused as a child, says he was denied compensation because of his criminal record
Arthur became angry and descended into addiction as a “coping mechanism”, becoming suicidal, and was repeatedly arrested for minor offences, such as making false calls to the emergency services.
“I wasn’t getting support from any agencies, and no one asked me, ‘Why is this man ringing the emergency services all the time?'”
“It was a cry for help. I was frustrated that I wasn’t being believed.”
Eventually, Arthur’s abuser, Shaun Burton, was convicted of multiple offences against children, including 11 counts of indecency with a child in relation to Mr Sherry.
But when Arthur, who suffers from complex PTSD, subsequently tried to make a claim through the Criminal Injuries Compensation Authority in 2013, it was rejected because of his criminal record and because he submitted his application beyond CICA’s time limit.
He was not allowed to appeal the decision.
Arthur, aged 12 in the picture, was regularly abused by his babysitter, Shaun Burton, from the age of five
Many survivors of grooming gangs have criminal records due to being exploited and coerced.
While the government recently announced plans to disregard child prostitution convictions for these victims, many are urging authorities to go further and pardon all related offences.
Former victims’ commissioner Dame Vera Baird said: “They were not exercising their own free will and voluntarily committing crime, so there should be a discretion to look at that and say, ‘No, that wasn’t their fault’.
“They should get compensation for all the evil that was done to them by that gang.”
In 2022, the Independent Inquiry into Child Sexual Abuse recommended that the government amend the Criminal Injuries Compensation Scheme so that “applicants with unspent convictions are not automatically excluded where offences are likely to be linked to the circumstances of their sexual abuse as a child”.
The government has refused to act on this recommendation.
However, Labour MP Sarah Champion has tabled an amendment to the upcoming Victims and Courts Bill, hoping to implement it, as well as widen eligibility to the scheme.
“Victims are seen as running a cannabis farm and get a conviction, before it actually turns out that they were a victim of modern slavery.
“These people, who are very clearly recognised as victims and survivors, aren’t getting the money that’s owed to them. The system is broken and the ministers need to get rid of it.”
‘I was frustrated that I wasn’t being believed,’ Arthur tells Sky News’ Alice Porter
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A government spokesperson said: “Last year, more than £164m was paid out under the Criminal Injuries Compensation Scheme to victims, and we are going further by removing the time limit for civil personal injury claims and doubling Home Office funding for services supporting adult victims and survivors of child sexual abuse.
“Changes to the way we compensate victims have been considered by successive governments, and our priority must always be to treat all victims of violence equally.”
Devon and Cornwall Police said: “Tackling sexual offending is a key priority for Devon & Cornwall Police and we are working hard to bring offenders to justice.
“We take reports of all sexual offences seriously and will carry out thorough investigations into reports, looking at all viable lines of enquiry.”
Nathan Gill was at Manchester airport, about to board a flight to Russia, when accepting bribes finally caught up with him.
Gill, the former leader of Reform UK Wales and a one-time member of the European Parliament, who on Friday was jailed for 10-a-half-years, was stopped by police before boarding and had his phone seized in 2021.
While they interrogated him, his home in Anglesey was raided, with detectives discovering more electronics and cash piles of €5,000 (£4,400) and $5,000 (£3,800) respectively.
Nathan Gill being questioned. Pic: Met Police
The evidence on Gill’s phone would damn him – he was in contact with a pro-Russian politician in Ukraine, Oleg Voloshyn, and had agreed to boost pro-Russia viewpoints in exchange for money.
Voloshyn would dictate the statement, and Gill would repeat it – in some cases, almost word for word – in the media or the European Parliament.
In one instance, Gill appeared on the now-banned Ukrainian TV channel, 112 Ukraine, which was known for its pro-Russian stance.
In the interview, he was critical of the Ukrainian decision to open criminal proceedings against Viktor Medvedchuk, the owner of the television channel and a personal friend of Vladimir Putin.
Nathan Gill. Pic: Met Police
Speaking to the outlet, he said he was “very concerned” about the investigation, and wondered whether it was meant to silence “opposition politicians”.
Prosecutors said messages on Gill’s phone showed that this was at his paymaster’s instruction, with Voloshyn offering a “reward” if he would say that it was unacceptable to persecute a person for their political convictions.
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Voloshyn also offered the MEP €2,000 (£1,750) if he would express concern that Mr Medvedchuk could no longer mediate with Russia on Ukraine’s behalf, the court heard.
He added that “V” – understood to be Mr Medvedchuk – did not believe Ukrainian President Volodymyr Zelenskyy had “true intentions to pursue a peace agenda”, prosecutors said.
Bundles of cash were recovered from Gill’s home. Pic: Met Police
Sure enough, Gill appeared on 112 Ukraine saying it was “very sad” that Mr Medvedchuk felt he no longer had Mr Zelensky’s backing to act as a mediator with Russia, and suggested that using him “would be a sensible thing to do”.
The messages traded in innuendo, referring to the exchange of “Xmas gifts” or “postcards” instead of money.
But as the pair grew more comfortable with each other, they bargained more explicitly, with the sum of “£5k” quoted for Gill’s work.
Dominic Murphy, head of Counter Terrorism Command at the Met Police, said Gill had also offered access to other MEPs.
“This is where we get into that slightly odd situation where it feels very much like a real effort to undermine democracy here,” he said.
“This is Nathan Gill reaching out to individuals that he knows, who are Brits, who might be willing to be paid to go and make speeches.”
Commander Murphy declined to name names, but said there was an ongoing investigation and that other people had been spoken to.
None of the pro-Brexit MEPs Gill allegedly approached have been interviewed under caution.
Pic: Met Police
Police confirmed there was no evidence to suggest Reform UK leader Nigel Farage was involved.
Gill was stopped at Manchester Airport on 13 September 2021, under schedule 3 of the Counter Terrorism and Borders Security Act 2019.
He offered police no explanation for his actions and answered no comment in a March 2022 police interview.
But the 52-year-old is believed to have had financial problems.
Mr Murphy added that while Gill appeared to have pro-Russian sympathies, he was primarily motivated by money.
The ex-MEP has been jailed for 10-and-a-half years after pleading guilty to eight counts of bribery between December 2018 and July 2019.
Following an investigation by counter-terrorism police, officers said they believe Gill likely took a minimum of £40,000 in cash and was offering to introduce other British MEPs so they could be bribed.
Voloshyn was picked up by the authorities on a trip to the US in 2021, which enabled the FBI to discover his end of the conversation.
He is now believed to be in Russia, but has been sanctioned by the UK government over allegations of trying to destabilise Ukraine.
Nathan Gill pleaded guilty to eight counts of bribery over pro-Russian statements. Including to media outlet 112 Ukraine. Pic: Met Police
He remains wanted in both Britain and Ukraine.
A Reform UK spokesman said: “Mr Gill’s actions were reprehensible, treasonous and unforgivable.
“We are glad that justice has been served and fully welcome the sentence Nathan Gill has received.”
Mr Farage, the Reform UK leader, said: “An investigation into Russian and Chinese influence over British politics would be welcome.”
The MP for Clacton previously described his former colleague as a “bad apple” and said he was “shocked” after Gill pleaded guilty to eight counts of bribery.
He said: “Any political party can find in their midst all sorts of terrible people.
“You can never, ever guarantee 100% that everyone you meet in your life, you shake hands with in the pub, is a good person.”
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