The UK’s competition watchdog, the Competition & Markets Authority (CMA), has found that makers of popular food brands have been raising prices by more than their costs over the past two years. This has resulted in higher prices for products such as baby formula, baked beans, and pet food. About three-quarters of branded suppliers have been making higher profits on individual products. Rising energy and fertilizer costs have been the main drivers of high food price inflation, but the CMA found that food firms have been increasing prices more than necessary, contributing to the inflation. As a result, consumers have been turning to own-label products, causing branded products to lose market share and overall profitability.
One area of concern highlighted by the CMA is the baby formula market, where prices have risen by a quarter over the past two years. The market is dominated by two major players, Danone and Nestle, and there is little evidence of parents switching to cheaper alternatives. The CMA expressed concerns that parents may not have the necessary information to make informed choices and that suppliers may not have strong incentives to offer competitive prices. However, a nutritionist and author stated that there is very little difference in nutritional value between branded and unbranded baby products due to strict UK regulations.
Some parents, like Gemma Maxwell from Glasgow, have started considering alternative brands after realizing that the nutritional value of different formulas is the same. However, others, like Diane Phillips from Staffordshire, still prefer the bigger brands due to their reputation. The British Retail Consortium suggests that families can make significant savings by switching to cheaper brands or own-label products that provide the necessary nutrition for a healthy baby.
The CMA will further investigate the baby formula market and supermarket loyalty card schemes. Some supermarkets have been offering cheaper prices exclusively to customers with loyalty cards, and the CMA will examine this practice in 2024. The watchdog wants to ensure that all customers have access to discounts on essential household products and that promotions are clear and transparent. In September, consumer group Which? warned that loyalty card schemes may not be as beneficial as they appear, with supermarkets increasing prices to make discounts seem larger. However, both Tesco and Sainsbury’s rejected these claims.
The CMA has the authority to enforce consumer law and work with companies to rectify any issues. If necessary, it can compel firms to change their business practices and even impose fines.
Original news source: Shoppers hit by escalating prices of branded goods (BBC)
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Group or Classroom Activities
Warm-up Activities:
– News Summary
Instructions:
1. Divide the class into small groups.
2. Give each group a copy of the article.
3. Instruct the groups to read the article and discuss the main points.
4. Each group should then work together to create a concise summary of the article.
5. After a set amount of time, have each group share their summary with the class.
– Opinion Poll
Instructions:
1. Divide the class into pairs.
2. Give each pair a list of questions related to the article (e.g. Do you think food brands should be allowed to raise prices higher than their costs?).
3. Instruct the pairs to discuss the questions and share their opinions with each other.
4. After a set amount of time, have a class discussion where pairs can share their opinions and reasons for their answers.
– Vocabulary Pictionary
Instructions:
1. Write a list of key vocabulary words from the article on the board.
2. Divide the class into small groups.
3. Instruct each group to choose a word from the list and draw a quick sketch to represent that word.
4. Without using any words, the group must try to convey the meaning of the word to the rest of the class through their drawing.
5. The other groups should try to guess the word based on the sketch.
6. Repeat the process with different words from the list.
– Think-Pair-Share
Instructions:
1. Give each student a few minutes to individually read and think about the article.
2. Pair up the students and instruct them to discuss their thoughts and opinions on the article with their partner.
3. After a set amount of time, bring the class back together for a whole-group discussion.
4. Encourage students to share their thoughts and ideas with the entire class.
– Future Predictions
Instructions:
1. Instruct each student to imagine they are a food industry expert.
2. Give them a few minutes to think about and write down their predictions for the future of food prices and consumer behavior based on the information in the article.
3. Divide the class into small groups and have them share and discuss their predictions with each other.
4. After a set amount of time, have each group present their predictions to the class.
Comprehension Questions:
1. According to the CMA, what have food brands been doing to prices over the past two years?
2. What are some examples of products that have experienced higher prices as a result?
3. What are the main drivers of high food price inflation?
4. How have consumers responded to the higher prices of branded products?
5. What concerns does the CMA have about the baby formula market?
6. What is the view of a nutritionist and author regarding the difference in nutritional value between branded and unbranded baby products?
7. How have some parents reacted to the realization that the nutritional value of different formulas is the same?
8. What will the CMA be investigating in 2024?
Go to answers ⇩
Listen and Fill in the Gaps:
The UK’s competition watchdog, the Competition & Markets Authority (CMA), has found that makers of popular food brands have been raising prices by more than their costs over the past two years. This has resulted in (1)______ prices for (2)______ such as baby formula, baked beans, and pet food. About three-quarters of branded (3)______ have been making higher profits on individual products. Rising energy and fertilizer costs have been the main drivers of high food price inflation, but the CMA found that food firms have been increasing prices more than necessary, contributing to the inflation. As a result, (4)______ have been turning to own-label products, causing branded products to lose (5)______ share and overall profitability.
One area of concern highlighted by the CMA is the baby formula market, where prices have risen by a quarter over the past two years. The market is dominated by two major (6)______, Danone and (7)______, and there is little evidence of parents switching to cheaper alternatives. The CMA expressed concerns that parents may not have the necessary information to make informed choices and that suppliers may not have (8)______ incentives to offer competitive prices. However, a nutritionist and author stated that there is very little difference in nutritional value between branded and unbranded baby products due to strict UK regulations.
Some parents, like Gemma Maxwell from Glasgow, have started considering alternative brands after realizing that the nutritional value of different formulas is the same. However, others, like Diane Phillips from Staffordshire, still prefer the bigger brands due to their reputation. The (9)______ Retail Consortium suggests that families can make significant savings by switching to cheaper brands or own-label products that provide the necessary nutrition for a healthy baby.
The CMA will further investigate the baby formula market and supermarket (10)______ card (11)______. Some supermarkets have been (12)______ cheaper prices exclusively to customers with loyalty cards, and the CMA will examine this practice in 2024. The watchdog wants to ensure that all customers have access to (13)______ on essential household products and that promotions are clear and transparent. In (14)______, consumer group Which? warned that loyalty card schemes may not be as beneficial as they appear, with supermarkets (15)______ prices to make discounts seem larger. However, both Tesco and Sainsbury’s rejected these claims.
The CMA has the authority to enforce consumer law and work with companies to rectify any issues. If necessary, it can compel firms to (16)______ their business practices and even impose fines.
Go to answers ⇩
Discussion Questions:
Students can ask a partner these questions, or discuss them as a group.
1. What is your opinion on food companies raising prices more than necessary?
2. How would you feel if you found out that the prices of your favorite food brands were inflated?
3. Do you think it’s fair for food companies to increase prices more than their costs?
4. Why do you think consumers have been turning to own-label products instead of branded products?
5. Do you think parents should switch to cheaper alternatives for baby formula if there is little difference in nutritional value?
6. How would you feel if you found out that you have been paying more for baby formula without realizing there are cheaper alternatives?
7. What factors do you consider when deciding whether to buy a branded product or a cheaper alternative?
8. Why do you think some parents still prefer bigger brands for baby formula despite the higher prices?
9. What do you think about supermarket loyalty card schemes? Do you think they are beneficial for customers?
10. How would you feel if you found out that supermarkets were increasing prices to make loyalty card discounts seem larger?
11. Do you think it’s important for all customers to have access to discounts on essential household products?
12. Why do you think the CMA is investigating the baby formula market and supermarket loyalty card schemes?
13. How do you think the CMA can ensure that promotions are clear and transparent for customers?
14. What actions do you think the CMA should take if they find that food companies are inflating prices unnecessarily?
15. Do you think fines are an effective way to enforce consumer law and rectify issues with business practices? Why or why not?
Individual Activities
Vocabulary Meanings:
Match each word to its meaning.
Words:
1. prices
2. products
3. inflation
4. market
5. brands
6. alternatives
7. savings
8. schemes
Meanings:
(a) Items that are made or manufactured
(b) The amount of money charged for goods or services
(c) Organized plans or programs designed to achieve a particular aim
(d) The general increase in prices and fall in the purchasing value of money
(e) A place where goods are bought and sold
(f) Money that is not spent or used and is kept for future use
(g) Other options or choices that can be used instead of something
(h) Distinctive names or symbols used to identify and differentiate goods or services
Go to answers ⇩
Multiple Choice Questions:
1. What has the UK’s competition watchdog found about popular food brands?
(a) They have been lowering prices below their costs.
(b) They have been raising prices more than their costs.
(c) They have been keeping prices the same as their costs.
(d) They have been reducing prices by a small margin.
2. What has been the main driver of high food price inflation?
(a) Decreasing energy and fertilizer costs.
(b) Stable energy and fertilizer costs.
(c) Rising energy and fertilizer costs.
(d) Fluctuating energy and fertilizer costs.
3. What has been the result of food firms increasing prices more than necessary?
(a) Consumers have turned to own-label products.
(b) Consumers have stopped buying food products.
(c) Consumers have started growing their own food.
(d) Consumers have switched to more expensive brands.
4. Which market has seen a 25% increase in prices over the past two years?
(a) Pet food.
(b) Baked beans.
(c) All of the above.
(d) Baby formula.
5. Who are the dominant players in the baby formula market?
(a) Tesco and Sainsbury’s.
(b) Danone and Nestle.
(c) Gemma Maxwell and Diane Phillips.
(d) The Competition & Markets Authority.
6. What concerns does the CMA have about the baby formula market?
(a) Suppliers may not have strong incentives to offer competitive prices.
(b) There is little difference in nutritional value between branded and unbranded baby products.
(c) Parents may not have the necessary information to make informed choices.
(d) All of the above.
7. What suggestion does the British Retail Consortium make to families?
(a) Grow their own food.
(b) Stop buying baby formula.
(c) Stick with bigger brands for their reputation.
(d) Switch to cheaper brands or own-label products.
8. What will the CMA investigate in 2024?
(a) Supermarket loyalty card schemes.
(b) Baby formula market.
(c) Nutritional value of baby products.
(d) Rising energy and fertilizer costs.
Go to answers ⇩
True or False Questions:
1. About three-quarters of branded suppliers have been making higher profits on individual products.
2. Falling energy and fertilizer costs have been the main drivers of low food price inflation.
3. Gemma Maxwell from Glasgow has started considering alternative brands for baby formula after realizing the nutritional value is the same.
4. The CMA expressed concerns about the lack of information available to parents in the baby formula market.
5. The CMA has found that makers of popular food brands have been lowering prices by more than their costs over the past two years.
6. The CMA has no authority to enforce consumer law and impose fines if necessary.
7. The UK’s competition watchdog is called the Competition & Markets Authority (CMA).
8. The CMA will not investigate supermarket loyalty card schemes in 2024.
Go to answers ⇩
Write a Summary:
Write a summary of this news article in two sentences.
Writing Questions:
Answer the following questions. Write as much as you can for each answer.
1. According to the UK’s competition watchdog, why have prices for popular food brands been increasing?
2. What specific products have experienced higher prices as a result of this inflation?
3. What concerns does the CMA have about the baby formula market?
4. How have consumers been responding to the rising prices of branded products?
5. What will the CMA be investigating in relation to supermarket loyalty card schemes?
Answers
Comprehension Question Answers:
1. According to the CMA, food brands have been raising prices by more than their costs over the past two years.
2. Some examples of products that have experienced higher prices are baby formula, baked beans, and pet food.
3. The main drivers of high food price inflation are rising energy and fertilizer costs.
4. Consumers have responded to the higher prices of branded products by turning to own-label products, causing branded products to lose market share and overall profitability.
5. The CMA has concerns about the baby formula market, particularly the fact that prices have risen by a quarter over the past two years. They are worried that parents may not have the necessary information to make informed choices and that suppliers may not have strong incentives to offer competitive prices.
6. The view of a nutritionist and author is that there is very little difference in nutritional value between branded and unbranded baby products due to strict UK regulations.
7. Some parents have reacted to the realization that the nutritional value of different formulas is the same by considering alternative brands. However, others still prefer the bigger brands due to their reputation.
8. The CMA will be investigating supermarket loyalty card schemes in 2024, particularly the practice of offering cheaper prices exclusively to customers with loyalty cards. They want to ensure that all customers have access to discounts on essential household products and that promotions are clear and transparent.
Go back to questions ⇧
Listen and Fill in the Gaps Answers:
(1) higher
(2) products
(3) suppliers
(4) consumers
(5) market
(6) players
(7) Nestle
(8) strong
(9) British
(10) loyalty
(11) schemes
(12) offering
(13) discounts
(14) September
(15) increasing
(16) change
Go back to questions ⇧
Vocabulary Meanings Answers:
1. prices
Answer: (b) The amount of money charged for goods or services
2. products
Answer: (a) Items that are made or manufactured
3. inflation
Answer: (d) The general increase in prices and fall in the purchasing value of money
4. market
Answer: (e) A place where goods are bought and sold
5. brands
Answer: (h) Distinctive names or symbols used to identify and differentiate goods or services
6. alternatives
Answer: (g) Other options or choices that can be used instead of something
7. savings
Answer: (f) Money that is not spent or used and is kept for future use
8. schemes
Answer: (c) Organized plans or programs designed to achieve a particular aim
Go back to questions ⇧
Multiple Choice Answers:
1. What has the UK’s competition watchdog found about popular food brands?
Answer: (b) They have been raising prices more than their costs.
2. What has been the main driver of high food price inflation?
Answer: (c) Rising energy and fertilizer costs.
3. What has been the result of food firms increasing prices more than necessary?
Answer: (a) Consumers have turned to own-label products.
4. Which market has seen a 25% increase in prices over the past two years?
Answer: (d) Baby formula.
5. Who are the dominant players in the baby formula market?
Answer: (b) Danone and Nestle.
6. What concerns does the CMA have about the baby formula market?
Answer: (c) Parents may not have the necessary information to make informed choices.
7. What suggestion does the British Retail Consortium make to families?
Answer: (d) Switch to cheaper brands or own-label products.
8. What will the CMA investigate in 2024?
Answer: (a) Supermarket loyalty card schemes.
Go back to questions ⇧
True or False Answers:
1. About three-quarters of branded suppliers have been making higher profits on individual products. (Answer: True)
2. Falling energy and fertilizer costs have been the main drivers of low food price inflation. (Answer: False)
3. Gemma Maxwell from Glasgow has started considering alternative brands for baby formula after realizing the nutritional value is the same. (Answer: True)
4. The CMA expressed concerns about the lack of information available to parents in the baby formula market. (Answer: True)
5. The CMA has found that makers of popular food brands have been lowering prices by more than their costs over the past two years. (Answer: False)
6. The CMA has no authority to enforce consumer law and impose fines if necessary. (Answer: False)
7. The UK’s competition watchdog is called the Competition & Markets Authority (CMA). (Answer: True)
8. The CMA will not investigate supermarket loyalty card schemes in 2024. (Answer: False)
Go back to questions ⇧
