Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

Rep. Ilhan Omar at a press conference.

Rep. Ilhan Omar (D-Minn.) led a letter on May 20, 2022 calling for a Federal Trade Commission probe into baby formula monopolies. (Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images)

Omar Leads Charge Against Baby Formula Monopolies Amid US Shortage

Democrats urge the FTC to probe "any unfair or unsustainable practices, like deceptive marketing, price gouging, and stock buybacks, that may be weakening our nutritional formula supply."

Jessica Corbett

Minnesota Congresswoman Ilhan Omar and 25 other House Democrats on Friday called for a federal probe of the nation's concentrated baby formula industry amid a national shortage that has prompted emergency action from lawmakers and the White House.

"We are writing to urge the Federal Trade Commission (FTC) to work with relevant federal agencies to investigate the U.S. baby formula industry and study any unfair or unsustainable practices, like deceptive marketing, price gouging, and stock buybacks, that may be weakening our nutritional formula supply and ultimately harming our constituents," states the Democrats' letter to the agency's chair, Lina Khan.

While acknowledging that the ongoing Covid-19 pandemic has caused supply chain issues, the letter also suggests that "the gradual consolidation of the baby formula market may be worsening these disruptions and deficiencies," highlighting that Abbott Nutrition, Nestlé, Perrigo, and Reckitt Benckiser collectively control about 90% of the U.S. market.

"This type of high market concentration may come at the cost of decreasing market redundancy and flexibility while increasing the risk of sector-wide shortages—even if a single plant ceases manufacturing," the document notes, referencing Abbott's recent facility closure and recall.

The lawmakers are also concerned about how the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) could be contributing to "such alarmingly high concentration" in the industry, due to exclusive contracts granted for the program, which boosts formula access for low-income families.

"We must make sure that no corners are being cut on any level when nutritional formula is such a necessity for many Americans," the letter asserts. "That is why we are requesting that the FTC use its 6(b) authority to conduct a wide-ranging study on the consolidation of the nutritional formula industry."

As the letter lays out:

The FTC should work with other federal partners to provide a report on the economic and health impacts of the formula industry's fragile supply chain and manufacturing capabilities. It should also include an analysis of business and financial practices by these formula companies that could be contributing to declines in affordability, consumer choice, and product quality. Lastly, this report should have recommendations to Congress and regulators on improving federal programs and regulatory or enforcement actions to strengthen domestic supply, prevent future shortages, and stabilize formula prices for all American families.

The Democrats are hoping for a response from Khan within the next month. Their call for FTC action came within hours of The Guardian reporting on financial documents and whistleblower testimony about how Abbott used recent windfall profits to enrich shareholders even as equipment at a factory that was later shut down in connection with bacterial contamination "was failing and in need of repair."

President Joe Biden on Wednesday invoked the Defense Production Act to increase the U.S. supply of baby formula and launched "Operation Fly Formula," which is using Defense Department planes to speed up imports.

Biden is also expected to sign the Access to Baby Formula Act, which Congress approved this week. The legislation allows the U.S. Department of Agriculture to waive requirements to enable families to keep buying formula with their WIC benefits.

The House also passed a bill to provide $28 million in emergency funding for the U.S. Food and Drug Administration to address the formula shortage and prevent similar events in the future, but that measure faces an uncertain future in the Senate.

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

Fulton County Subpoenas of Trump Allies Offer Hope 'That Justice Will Ultimately Be Served'

"The coordinated attempts by former President Donald Trump and his associates to discount and ignore the will of Georgian voters during the 2020 election cannot be swept under the rug," said one activist.

Jessica Corbett ·

Russian Official Makes Nuclear Threat Over US Support for Ukraine War Crimes Probe

Another official responded to Western sanctions by suggesting that Russia could reclaim Alaska.

Brett Wilkins ·

Biden Denounced for Imposing New Sanctions as Iran Nuclear Talks Falter

One Middle East expert accused the U.S. administration of "continuing and embracing Trump's max pressure policy, while expecting a different result."

Brett Wilkins ·

Under 'Draconian Abortion Ban,' Woman in El Salvador Sentenced to 50 Years for Pregnancy Loss

Laws like El Salvador's are "now being replicated in states across the U.S.," noted one observer.

Julia Conley ·

Warren, Sanders, and Others Blast Biden's 'Failure' on Federal Cannabis Policy

While commending Biden's pardons and commutations, six senators wrote that "much more has to be done to address the racist and harmful legacy of cannabis policies on Black and Brown communities."

Jessica Corbett ·

Common Dreams Logo