Spotlight on tie-ups between formula milk firms, private hospitals

Firms engage in sponsorships, payments to have brands as default formula for longer time: Competition watchdog

Rows of baby formula powder tins at FairPrice Xtra supermarket. ST PHOTO: LIM YAOHUI

Whether it is by paying for hospitals' dinner-and-dance functions, or sponsoring the running of their shuttle buses, formula milk companies have waltzed their way into hospital maternity wards.

Some go further, giving hospitals outright monetary contributions in periodic lump sums.

In return, they get greater access to new parents and their babies, in the form of having their brands being offered as the default formula milk in maternity rooms for a longer period.

An inquiry report by the Competition Commission of Singapore (CCS) released yesterday said such deals have been on the rise, possibly reflecting hospitals' increasing needs and the importance of the hospital channel to the manufacturers as a form of marketing and brand outreach.

This first-mover advantage is key, given that many parents do not switch brands after their babies have got used to them.

To get that foot in the door, the manufacturers ensured their products stayed on the rotation schedules for longer periods, by providing sponsorship to the hospital or paying "rotation fees".

They also sponsor activities at public hospitals, but this does not influence their milk rotation schedule, said the CCS.

According to the hospitals it contacted, such payments and "in kind" monetary sponsorships by formula milk manufacturers help reduce the cost of running such activities, and defray the cost of nursing education and training.

Manufacturers sponsor a range of activities targeted at parents and parents-to-be, as well as hospital staff. They also underwrite hospital activities such as the printing of maternity brochures, as well as corporate dinner-and-dance events.

Some manufacturers also give sums of money, computed by how long they want their brands to be on rotation. If they give, for instance, twice as much as the standard fee, their brands can be on rotation for twice as long.

There are seven private hospitals in Singapore offering maternity services. Two responded to queries last night.

A Thomson Medical spokesman said brands are rotated on a monthly basis, and all suppliers contribute the same sum to be included in the rotation. He added: "We work with each milk company to a different extent, depending on how they can contribute towards our objectives of education and preparing parents for parenthood."

The companies do not sponsor the supply of baby milk formula to the hospital.

Thomson Medical is actively moving towards Baby-friendly Hospital Initiative certification, he said, with a 96 per cent breastfeeding rate at the time of discharge. For those who cannot breastfeed, they have access to all major brands of milk. Only when mothers do not have a preference are they given the default formula.

Mount Alvernia Hospital also said it does not accept milk powder sponsorship from manufacturers, and that it accepts sponsorship from formula milk manufacturers only if they are related to expanding patients' knowledge in baby care and nutrition. It did not say whether it receives rotation fees.

Parkway Pantai - which Gleneagles, Mount Elizabeth, Mount Elizabeth Novena and Parkway East hospitals are under - and Raffles Hospital did not respond to queries at press time.

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A version of this article appeared in the print edition of The Straits Times on May 11, 2017, with the headline Spotlight on tie-ups between formula milk firms, private hospitals. Subscribe