May 13, 2022

Duckworth asks FTC to examine formula market

Source: Politico


Sen. Tammy Duckworth (D-Ill.) on Thursday wrote to Federal Trade Commission Chair Lina Khan asking for a “wide-ranging study” of market dynamics and competition in the infant formula industry.

The move comes as the country grapples with major disruptions of baby formula at the retail level and a dangerous shortage of specialty formulas that are lifelines for thousands of children and adults with unique medical needs. Supply chains have been rocky for several months, but the situation worsened after the monthslong shutdown of an Abbott Nutrition plant in Sturgis, Mich., that was linked to four infant hospitalizations from Cronobacter sakazakii. Two infants died.

Duckworth — who sits on the Senate Commerce Committee, which oversees FTC — asked the panel to use what’s known as 6(b) authority to “conduct a wide-ranging study of the infant formula industry to examine how that market’s composition, along with the behavior and business practices of market participants, affect competition, consumer prices, consumer choice, product safety, product quality, product transparency, supply chain efficiency, supply chain resilience and public health.”

In 2018, it was estimated that four companies — Abbott, Mead Johnson, Nestlé and Perrigo — controlled about 89 percent of the U.S. market.

“The potential adverse impact on public health is particularly important considering recent infant formula industry production challenges and broader supply chain issues have led to shortages of specialty infant formula products that are medically necessary for certain consumers,” Duckworth wrote.

Under 6(b) authority, FTC has subpoena power to obtain information to produce a “special report on the impact of industry consolidation and business practices on consumers who depend on infant formula product,” she wrote.

“Shedding light on the business practices and market conditions that led to sustained infant formula shortages will enable Congress and regulators to develop effective legislative and regulatory responses to strengthen the resiliency of the infant formula supply chain and prevent future infant formula shortages,” Duckworth wrote.

By:  Helena Bottemiller