Following the 2022 infant formula crisis with Abbott Nutrition at its epicenter, Federal agencies other than the FDA are investigating the industry. It is apparent that manufacture of infant formula is a narrow oligopoly, and that half of all U.S. product is purchased by the Federal government under the Special Supplemental Nutrition Program for Women, Infants and Children (WIC). This creates the potential for collusion among manufacturers who could escalate the price paid by the government and indirectly, to non-WIC consumers.

The Federal Trade Commission has issued civil investigative demands to all major manufacturers requesting information that will be applied to determine whether there has been “collusional coordination with respect to bidding for federal or state contracts”.

Apparently, Abbott Nutrition has responded indicating that the company was unaware of any collusion or coordination.  Nestle confirmed that it has complied with the FTC request.  Mead Johnson declined to comment but assured a request by an investigative journalists that the Company complies with regulatory and enforcement agency requests.  Not that it has any alternative!

The obvious initiative by the Federal government to ensure that there is fair play in contracts will encourage more competition in the manufacture of infant formula.  Greater scrutiny is obviously required over evaluation and granting of large contracts. Penalties for proven illegal activities including bid rigging and inflating of prices should result in heavy financial penalties and prison terms for executives.  Now we need some whistleblowers. Hopefully their allegations will not be ignored for three months as with the FDA.