Baby Formula Shortage: How did we get to the point that 4 companies control 80% of the market?
FDA regulation of formula is so stringent that most of the stuff that comes out of Europe is illegal to buy here due to technicalities like labeling requirements. Nevertheless, one study found that many European formulas meet the FDA nutritional guidelines—and, in some ways, might even be better than American formula, because the European Union bans certain sugars, such as corn syrup, and requires formulas to have a higher share of lactose. U.S. policy also restricts the importation of formula that does meet FDA requirements. At high volumes, the tax on formula imports can exceed 17 percent. And under President Donald Trump, the U.S. entered into a new North American trade agreement that actively discourages formula imports from our largest trading partner, Canada.
https://www.theatlantic.com/ideas/archive/2022/05/baby-formula-shortage-abbott-recall/629828/
Left unsaid by formula manufacturers,” Dayen wrote, “is their iron grip on the market, which exacerbates supply disruptions. The shortage is a manifestation of the same problems we’ve seen with the supply chain, made worse by monopoly.”
Companies like Abbott spend hundreds of thousands of dollars per year to retain their hold on the market, noted Sarah Klee Hood, a candidate for the U.S. House in New York’s 22nd district.
Dayen pointed out that in 2018, the Trump administration strong-armed Ecuadorean delegates to the United Nations World Health Assembly out of supporting a resolution to support breastfeeding and to urge governments to counter misleading claims about baby formula.
Lobbyists for the industry were present at the assembly, as Common Dreams reported at the time.
The Trump administration’s maneuvers were “stage-managed by the baby formula industry, which particularly wanted to keep its lock on the developing world,” wrote Dayen. “The interests of private monopolists were put ahead of public health and security.”
In the U.S., said Dr. Steven Thrasher of Northwestern University, the corporate-driven baby formula shortage is hitting just as the Republican Party is preparing to roll back the right to abortion care, the majority of which is sought by women who already have at least one child and who live in low-income households
consequences. One academic study found companies that win state auctions are able to mark up the prices of their infant formula products by between 26-35 percent. Another academic study, which was funded by USDA, found that the winners of state auctions end up dominating the market for infant formula, and that not all of those who end up buying the company’s product receive WIC benefits.
In other words, the system has helped dominant suppliers consolidate their oligopoly power. Three corporations sell the vast majority of the infant formula in the U.S. — Abbott, Mead Johnson and Nestlé — and those who don’t qualify for WIC benefits, including many low-income people, suffer as a result. The WIC eligibility cutoff is 185 percent of the federal poverty level. Though the threshold varies by household size, a single parent working 40 hours per week would only be able to make $15.50 per hour to qualify for the program.
submitted by /u/sechumatheist
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