A PYMNTS Company

America’s Addiction To Monopolies Caused The Baby Food Shortage

By  |  May 18, 2022

By Samanth Subramanian, Quartz

The US’ vast shortage in infant formula has one immediate cause: the suspension of operations in an Abbott Laboratories plant in Michigan earlier this year, after samples of a lethal bacteria were found in it. But beyond that lies a bigger structural problem plaguing the American economy: a tendency for many sectors to be controlled by a few companies, or even just one.

The baby food sector, for instance, is an oligopoly, in which two companies⁠—Abbott and the Reckitt-owned Mead Johnson⁠—dominate three-quarters of the market by sales. Further, the federal Women, Infants and Children (WIC) program, which offers supplemental nutrition for low-income families, buys and distributes nearly half of all baby formula in the US. The WIC program contracts with a specific company in each state, setting up a de facto monopoly situation. Abbott is the WIC’s contracted supplier in 34 states.

Continue Reading…