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U.S. House will investigate baby formula shortage

Kitco News

WASHINGTON, May 13 (Reuters) - The U.S. House Oversight Committee said on Friday it plans to investigate the four largest manufacturers of baby formula and seek answers on how to ramp up production amid a nationwide shortage.

"The infant formula shortage is a crisis for American families," the committee said in a Twitter post.

U.S. Representative Carolyn Maloney, who leads the committee, sent letters seeking information to Abbott Nutrition, Mead Johnson Nutrition, Nestle USA and Perrigo (PRGO.N), ABC News reported.

"The national formula shortage poses a threat to the health and economic security of infants and families in communities across the country - particularly those with less income who have historically experienced health inequities, including food insecurity," the letter said.

The investigation, which will look at potential price gouging among other issues, is the latest move in Washington to address the shortage.

Abbott Laboratories (ABT.N) in February recalled some baby formulas, including certain Similac products, made at the plant in Sturgis, Michigan, after complaints about bacterial infections in infants who had consumed the products.

Formula shortages have been compounded by supply-chain snags and historic inflation, leaving about 40% of baby formula products out of stock nationwide, according to data firm Datasembly. read more

Less than half of babies born in the United States were exclusively breast-fed through their first three months, according to the Centers for Disease Control and Prevention 2020 Breastfeeding Report Card.

U.S. President Joe Biden met on Thursday with executives from infant formula manufacturers and retailers, pressing them to do everything possible to get families access. read more

Some manufacturers have been ramping up production for weeks and officials are also focusing on how to get formula on store shelves faster, said Brian Deese, director of the White House National Economic Council.

The retailers told Biden their top ask is more flexibility on the types of formula they can sell, while consumers need more flexibility on the types they can buy, particularly through the WIC program for low-income families, Deese told CNN.

The nutrition program for Women, Infants and Children is a federal assistance scheme administered by U.S. states.

About half of infant formula nationwide - a roughly $4 billion market - is purchased by participants using WIC benefits, the White House said, and rules set by individual states have a big effect on the availability and distribution of infant formula.

The White House on Friday will reissue guidance, first given in February after the Abbott recall, for states to be flexible in allowing WIC benefits to be used on a wider variety of products, Deese said.

The Food and Drug Administration will announce new steps in the coming days on importing certain infant formula products, the White House said on Thursday, and Biden has asked the Federal Trade Commission to probe reports of predatory conduct such as price gouging.

Deese would not speculate on how long the shortages might last.

"All of these steps together will make progress. It's not going to solve itself in a day or week," he said.

Two other House of Representatives committees have announced hearings on the shortage.

Reporting by Doina Chiacu in Washington Editing by Chizu Nomiyama and Matthew Lewi
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