Topline
Months after baby formula shortages rattled parents, consumers are still taking a hit, reporting rapid price increases for U.S.-manufactured bestseller Enfamil at major retailers, as well as lingering shortages.
Reckitt, the U.K.-based parent company of Enfamil manufacturer Mead Johnson, confirmed that Enfamil ... [+]
Key Facts
Parents are complaining in the comment sections of Enfamil’s official social media accounts, alleging that prices have increased seemingly overnight at retailers like Walmart and Target, with one Twitter user calling Enfamil formula prices “highway robbery.”
Reckitt, the U.K.-based parent company of Enfamil manufacturer Mead Johnson, confirmed that Enfamil raised prices in February in an email to Forbes, stating it previously canceled price increases to aid consumers amid the 2022 infant formula shortage, but suffered as the cost of formula ingredients rose by more than 60% on average last year.
Enfamil has acknowledged price increases in tweets to several outraged Twitter users, writing: “At times, we must increase our prices to ensure we continue to bring high quality, innovative products and services to the marketplace.”
In response to one user who said their son’s formula is nearly $8 more expensive than several weeks ago, Enfamil wrote that formula pricing can be impacted by “research behind our products, the quality of our ingredients, as well as the cost inflation for production processes, packaging, ingredients and transportation.”
Reckitt wrote to Forbes it would work to limit further price increases, and Enfamil encouraged one user in a March 7 tweet to try “comparison shopping to determine the most competitive price available.”
Some users noted in addition to becoming more expensive, Enfamil is still hard to find, marking a continuation of shortages that have marred the formula industry for the past year.
Enfamil’s price increases follow the expiration of the U.S. government’s suspension of infant formula tariffs in January, which opened the door for formula (both foreign and U.S.-produced) to become more expensive.
Key Background
Enfamil’s price increases follow a year of tumult for the infant formula industry. Infant formula faced widespread shortages last year in a crisis that is recovering but still ongoing. The shortages unfolded as Abbott, a major producer of U.S. infant formula, announced a recall and shut down a Michigan manufacturing plant after bacteria was found. More than 40% of baby formula was out of stock in May, and Reckitt said in December it expected infant formula shortages to last until the spring. The infant formula market was vulnerable because of its high consolidation—just four companies produce 90% of American-made formula—which magnifies the impact of production issues and recalls. The crisis was also exacerbated by Covid-19-related supply chain disruptions that impacted ingredients used in infant formula. President Joe Biden signed a bill in July suspending tariffs on infant formula imports through the end of 2022. The Food and Drug Administration also conducted an internal review and identified 15 causes of the shortages, including a lack of training and outdated information technology.
What To Watch For
House Republicans are launching an investigation into the FDA’s handling of the infant formula shortage, the Wall Street Journal reported. House Oversight and Accountability Committee Chairman James Comer (R-Ky.) and Rep. Lisa McClain (R-Mich.) requested communications between the FDA, the White House and the Department of Health and Human Services on Tuesday. Former FDA deputy commissioner Frank Yiannas is set to testify before the panel next week about the FDA’s response to the crisis, which the agency admitted was slowed by delays in processing whistle-blower complaints and infant formula tests.
Tangent
Formula prices are also increasing for non-U.S. consumers. Canadian parents noted formula prices, including Enfamil, rose drastically over the past month at retailers, Walmart included. New Zealand retailers have also raised prices of formula and other baby supplies due to rising supplier costs.
Surprising Fact
Last month, Reckitt announced a voluntary recall of 145,000 cans of Enfamil for fear of potential bacteria contamination.
Further Reading
How in the World Is the Baby Formula Crisis Still Going? (The Daily Beast)
GOP Lawmakers Launch Probe Into FDA’s Handling of Baby-Formula Shortage (Wall Street Journal)
The US Can’t Figure Out How to Prevent Baby Formula Shortages (Bloomberg)
