Biden's baby formula shortage looks to persist well into next year, according to manufacturer
· Dec 1, 2022 ·

According to the largest maker of baby formula, the shortage we've seen throughout 2022 looks to continue well into next year.

Man, I sure am glad the adults are back in charge. We can't feed our children anymore, but at least the mean tweets are gone.

The near year-long infant formula shortage in the United States that prompted the intervention of the White House is likely to "persist" until spring, according to Reckitt Benckiser, the maker of what is now the biggest brand in the market, Enfamil.

Panicked parents had earlier this year emptied the baby formula aisles at supermarkets after former top U.S. manufacturer Abbott Laboratories (ABT.N) in February recalled dozens of types of its Similac, Alimentum and EleCare formulas.

More than a year after the recall, and after White House action, we have yet to return to normal.

Some reminders of how this crisis has unfolded:

It's almost as if this administration isn't the most competent group of individuals ever put together.

Supplies are yet to return to normal since the peak of the crisis in May and June, despite the U.S. making progress in replenishing stocks, said Robert Cleveland, Reckitt senior vice president, North America and Europe Nutrition.

"I suspect that will persist to some degree until the spring resets," he said. "When we talk about the crisis we talk about the condition of the shelves and how they appear to consumers, and how well that shelf meets their needs."

A major issue is that one specific company is being favored by the US government, creating a monopoly that limits the competition for the formula market.

Its top position has been further boosted by the United States saying it will temporarily cover the cost of baby formula for low-income families dependent on government discounts in states contracted with the company.

Companies normally bid for state contracts to be the sole provider of baby formula for low-income families under the Women, Infants and Children (WIC) programme. In their bids, they offer a "rebate" in the form of discounts to the states.

The government's intervention, aimed at incentivising firms to boost supplies effectively covers that rebate.

Reckitt has said its formula factories are operating 24/7, and it was feeding more than 40% of all low-income WIC infants.

"Certainly at some point in the future, we expect they (the United States Department of Agriculture) will want to return the programme to normal," Cleveland said.

"What we're telling them is to give us enough notice - to put, essentially, a date on the calendar....don't try to shock the system by making it happen too quickly - give us time to adjust because we'll have to adjust our production, we'll have to adjust our distribution," he said.

For now, all of our eggs are in one basket.

Hopefully, things will return to normal and the crisis can finally come to an end.

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