Democratic lawmakers see a bigger problem amid a worrying shortage of baby formula across the country: the increasing consolidation of corporate power through mergers and acquisitions leading to rising income inequality.
“The shortfall was due in large part to corporate greed and consolidation. There are only four manufacturers of infant formula in the United States,” Rep. Rosa Delaro (D-Conn.) noted Tuesday.
DeLauro introduced legislation this week that would boost funding for the Food and Drug Administration aimed at bringing more firms to the heavily regulated baby formula market.
Abbott, Reckitt Benckiser, Nestlé and Perrigo all but halted production for nearly all infant formula sales in the US and earlier this year recalled several brands of formula, leading to widespread shortages among distraught parents nationwide. And there was panic. The crisis has been felt most by low-income parents, who rely on programs such as the Special Supplemental Nutrition Program for Women, Infants and Children, known as WIC.
Calling for an investigation into Abbott and even holding the company criminally liable for the unsanitary conditions that led to the closure of one of its factories, Democrats, in particular, called for a monopoly in the US. There are harmful economic impacts on the home.
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Last week, eight Senate Democrats wrote to Agriculture Secretary Tom Vilsack urging him to do more to address consolidation within the infant formula industry. On Wednesday, two more Democrats fired a letter to Abbott’s CEO, which outlined the point and asked for more information about the company’s stock buybacks and executive compensation in recent years.
“This corporate concentration, combined with decades of inaction by regulators, allows your company to skate with subpar security protocols, knowing that consumers don’t have the option of easily switching to a competitor,” Sans Elizabeth Warren (Mass.) and Corey Booker (NJ) concluded in the letter.
Four cases of a dangerous bacterial infection in infants were linked to formula produced by an Abbott-owned plant. Two cases were fatal; The company has said there is “no evidence” its product is to blame, even though the FDA found unhealthy conditions at the plant.
Few, if any, of these calls by lawmakers would be an immediate solution to the crisis. The law, which is advanced this week, also won’t have immediate effect on store shelves, even if it becomes law quickly. But Democrats plan to put the issue at the center of and ahead of the midterm election, pledging to bring formula maker executives to Capitol Hill for a hearing this month.
On Monday, Abbott said it had reached an agreement with regulators to restart production at its largest domestic factory, although any new products would ship from the site to help ease national shortages. Before it would still be there for over a month.
Arthur Delaney contributed reporting.
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