FTC probes infant formula makers suspected of anti-competitive activity

Photo (c) Oscar Wong - Getty Images

It’s not clear what prompted the investigation

The Federal Trade Commission (FTC) has opened an investigation into manufacturers of infant formula to determine if the various companies engaged in collusion on their bids for state contracts, in violation of antitrust laws.

Companies bid against one another to win contracts to supply food for the Women, Infants and Children program, which includes infant formula. The FTC says any collusion on bids would likely increase the cost of the product.

Abbott Labs, the maker of Similac infant formula, told the Wall Street Journal that it is cooperating with the investigation. Lawyers for the company have said they are unaware of any collusion and are in the dark about what triggered the probe.

The industry has drawn regulator’s attention since the COVID-19 pandemic, when a shutdown of Abbott’s main production facility, coupled with supply chain issues, created shortages in the infant formula market.

In February 2022, Abbott recalled powder formulas, including Similac, Alimentum, and EleCare, that were manufactured at its Sturgis, Mich., plant. The firm said it had received complaints related to Cronobacter sakazakii or Salmonella Newport in infants. Cronobacter sakazakii can cause fever, poor feeding, excessive crying, or low energy in infants.

In June, Abbott Labs reopened the Sturgis facility but it took several weeks to make it fully operational.

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