Abbott Nutrition eyes June 4 for restarting of formula pant
WASHINGTON — A massive recall is getting most of the blame for the U.S. baby formula shortage, but experts say the products have long been vulnerable to this type of crisis due to decades-old policies that have allowed a handful of companies to corner the market.
Those government rules — aimed at assuring safe, affordable formula — are getting renewed scrutiny as President Joe Biden’s administration rushes to import formula from Europe.
“There’s perfectly good and safe baby formula available around the world. We just don’t have access to it,” said Bindiya Vakil, CEO of Resilinc, a supply chain analytics firm. ”We’ve created this problem by not setting up an infrastructure for imports.”
Abbott Nutrition said Tuesday it expects to restart its shuttered Michigan plant June 4 and begin shipping new formula to stores about three weeks later. The factory is the largest of its kind in the U.S. and has been closed since February, hobbling supplies of popular formulas and specialty formulas for children with rare medical conditions.
The company also said it received permission from regulators to release 300,000 cans of its EleCare specialty formula for babies with allergic and digestive disorders. The product was not part of a February recall.
Lawmakers will hold three hearings on the issue this week, calling on company executives, government regulators and outside experts to testify. The attention could spur changes to government safety and contracting rules that have been in place since the 1980s and favor big U.S. manufacturers that are capable of navigating the complex requirements.
Baby formula is one of the few American products essentially unaffected by globalization, with 98% of the supply manufactured domestically. Four companies account for roughly 90% of the market: Abbott, Reckitt, Nestle and Perrigo, according to industry figures. That consolidation mirrors similar trends across the food industry.
But infant formula wasn’t part of a Biden administration initiative last year spotlighting dangerously concentrated industries, including prescription drugs, airlines, hearing aids and internet services.
The Federal Trade Commission announced Tuesday that it has launched an inquiry into the formula shortage, seeking information on any deceptive or fraudulent business practices related to it. The agency said it also aims to shed light on what led to the concentration in the baby formula market and the weak supply chains.