Why don't we have several makers of infant formula in the U.S.?

[CTyankee]

It doesn't make sense for us to have just one producer of a product so needed and essential.

[Skittles]

1. it's a result of capitalism gone wild

buyouts and buyouts until the market is controlled by very few companies

[Rebl2]

10. Yep

[elleng]

2. Failure of anti-trust enforcement.

[SheltieLover]

3. +1,000!

[uponit7771]

19. +1,

[inthewind21]

24. That and

years of hacking away at the anti-trust laws we still barely have.

[exboyfil]

4. Around 1980 one of the more popular policy debate cases

was going after infant formula makers for selling to the 3rd world. They were quite demonized at the time.

It seems infant formula is particularly difficult in terms of logistics. You almost need multiple plants running at less than maximum capacity (who pays for that) or a way to mothball a plant in case a producing plant goes down. The stuff can't be stored for long periods of time. If you are producing excess, storing it for a period of time, and then pitching it - someone has to pay for that as well.

[RockRaven]

5. Because it is more profitable for the owning/ruling class for the masses to suffer calamities

from time to time than it is to have things structured in such a way as to avoid them.

[FakeNoose]

6. Cheap foreign labor translates into higher profits for the importers

... so it doesn't pay to build expensive plants here in the US. Also the US has a lot more safety controls for food manufacturing within our borders. We can't control how other countries enforce their safety regs.

Wouldn't it be nice if the baby formula mfgrs were required to operate plants within our borders AND the companies must be women-owned and operated?

[walkingman]

7. $$$$$$$ in America it is always about the money.

[sop]

8. Trump's USMCA trade deal made it virtually impossible for the US to import formula from Canada.

"In July 2020, the U.S. entered into the United States-Mexico-Canada Agreement (USMCA), which discouraged formula imports from Canada due to an increased surcharge per kilogram."

"Trump bears much of the blame for the current shortage of baby formula in the U.S, since his Administration's USMCA free trade agreement has made it virtually IMPOSSIBLE for our country to import infant formula from Canada."

https://www.newsweek.com/baby-formula-shortage-trump-cananda-usmca-1708188

That didn't stop Sen. Rick Scott from saying: "I can give you pictures from all over the world. This is Panama. They've got plenty of baby formula, and this is the United States - no baby formula. I can give you pictures from Canada, Israel Brazil, all over the world. There's plenty of formula out there."

[Rebl2]

12. Guess

Ricky conveniently forgot about what tfg did on that trade agreement.

[MOMFUDSKI]

9. Gotta offshore

to make those big bucks.

[womanofthehills]

11. There are 4 main companies but just closing one is problematic

How many companies make baby formula?
Four companies control about 90% of the US baby formula market – Abbott (which accounts for nearly half the market), Mead Johnson Nutrition, Nestlé USA and Perrigo. Only 2% of formula is imported and FDA rules make it very https://www.theguardian.com/us-news/2022/may/18/baby-formula-shortage-why-is-there-none-what-to-do-causes-explained://www.theguardian.com/us-news/2022/may/18/baby-formula-shortage-why-is-there-none-what-to-do-causes-explained for new companies to enter the market.

The fact that there are so few companies means that when one factory is shut down, it creates a domino effect, Kellams said. A letter to the agriculture secretary, Tom Vilsack, from eight senators including Cory Booker and Elizabeth Warren stated: “The infant formula industry has reached an alarming level of corporate concentration.
https://www.theguardian.com/us-news/2022/may/18/baby-formula-shortage-why-is-there-none-what-to-do-causes-explained

[pandr32]

13. Competition was supposed to cause better products and prices

The old 'free market' talking points.

[lindysalsagal]

20. Except they don't admit that there's nothing free about our markets.

[pandr32]

22. Exactly!

[KY_EnviroGuy]

14. Best explanation I've seen is in this video....

The Real Root Cause Of The Baby Formula Shortage | The Katie Phang Show
May 20, 2022
MSNBC

Babies around the United States are suffering due to an interruption in distribution of formula nationwide. Matt Stoller of the American Economic Liberties Project joins Katie Phang to discuss the growing issue along with the root cause.

We have to remind ourselves that baby formula is a very strictly regulated product that's taken orally by infants, so it must be thoroughly controlled and frequently tested for contamination and proper formulation.

The public is reacting to this shortage as if we're discussing bags of Cheetos.

KY........

[mcar]

15. We have 4

[maxsolomon]

25. and more than 2 is "several", so we have several.

how many should there be? 5? 50? 500?

[mcar]

27. ???

I was responding to the OP:

Why don't we have several makers of infant formula in the U.S.?

OP asked why do we have only one. I said we have 4. Yes, that's several so we do have several. Obviously, there should be more, but I have no idea how many more.

[maxsolomon]

29. right. I should have responded directly.

please don't report me for "Bigotry/Insensitivity"!

[mcar]

30. Well, ok, but just this once

[Chainfire]

16. Competition is frowned upon in this country.

It is hard to fix prices if you have competition.

[Emile]

17. Two words: predatory capitalism

[SYFROYH]

21. I think it was an NPR piece that explained the near monopoly like grip of manufacturers.

Apparently, it has to do with having a contract with WIC. The brands that get a contract with WIC will be the brands stores stock up. WIC purchases are such a big part of the market that it doesn't make economic sense to stock up on other brands. It's more complicated than that, but that's the short story that I remember.


They reported an amazing statistic that the US gov buys 50% of all baby formula

[Celerity]

26. Yes, only the Big 4 brands are usually WIC eligible. Pure regulatory/pseudo capitalistic capture.

Typical US systemic control scam.

[inthewind21]

23. There's not just one

There are 4. On stopped production because of contamination.

[Dave says]

28. It's late stage, monopoly capitalism

All major vectors of our economy are dominated by one, two, sometimes three firms, enabling extraction of monopoly rents for the basics of western life.

Welcome to life under the oligarchs! Watch as they continue to fund and encourage the march to autocracy. Work harder! Pay those rents!! Someone has to pay for their Bordeaux and foie gras, yachts, multiple luxury homes and cars. And they’ve decided it will be us.

They’ve decided to deepen their extraction of wealth from we, the rascal multitudes, especially now that their agents have thoroughly infiltrated most of the apparatus of our “democracy”. They’ve basically followed Gramsci’s advice that one must march through the long hallways of power before there can be revolution. However, Gramsci meant we, the multitude, must march, not agents of the already powerful. They marched while most of us were asleep.

[jmowreader]

31. We have four

Problems I see...

1) As far as the FDA is concerned, formula is a drug. It is made under protocols as strict as those for drugs. Building a drug factory is REALLY expensive. Running one is even worse.

2) The federal government buys half the formula made, and under their procurement rules you receive about enough money for it to buy the ingredients and run the machines.

3) The parents' lobby is extremely powerful. If you sold the product to the general public for more than the cost of materials and production, they'd have your ass.

Hence...

4) If you have a product in your portfolio that is extremely highly regulated, and that you can't turn a profit on because no one will let you, you are probably not going to open very many factories to make it. There are only four companies in the US that make it - Abbott, Reckitt Benckiser, Nestle and Perrigo. Perrigo makes store-brand pharmacy aisle products. Nestle is a food company, Abbott's core strength is prescription drugs and most of what Reckitt sells are cleaning supplies.

[CTyankee]

32. This is sounding -- don't laugh -- like where we were when WW2 broke out. Every factory was

turned into making some form of war materiel. No cars were made in those years. 80 some odd years ago we just went ahead and DID it. We made tanks, planes, ships in record time. Now it seems to me we already late in making supply for the demand.

I hope something like this is in the Biden administration's BBB plan. If he pulls it off, he will be thanked by many grateful Americans.