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All of a sudden! New York declared a state of emergency due to shortage of infant formula

證券時報 ·  {{timeTz}}


New York City Mayor Eric Adams declared a state of emergency on May 22 local time due to a shortage of infant formula.


In fact, there has been a shortage of infant formula in the United States for several months. 78000 pounds of infant formula have been airlifted from Europe by military aircraft to Indianapolis, Indiana, through Operation Flying Formula, Biden said in a statement on social media on May 22.


Shortage of infant formula, the mayor of New York declared a state of emergency in New York


New York City Mayor Eric Adams signed an emergency executive order on May 22, declaring the city a state of emergency due to a shortage of infant formula, CCTV News reported.


Citing local regulations in New York, the bank's decree requires the sale price of infant formula in New York City to remain stable and authorizes the city's consumer protection department to prevent fraudulent speculation in the market.


Adams said the shortage of infant formula caused "unimaginable pain and anxiety" to local families, according to the overseas website. He mentioned that signing an emergency executive order would crack down on price fraud related to milk powder to prevent retailers from driving up prices. New York City Deputy Mayor Isom, who is responsible for health and public services, also said, "the nationwide shortage of infant formula is hurting parents and families in our city." "


Biden announces priority for supply of two infant formula manufacturers


President Joe Biden announced that Abbott Laboratories and Reckitt were the first manufacturers of infant formula to be given priority under the Defense production Act, the White House said in a statement on its website on May 23.


78000 pounds of infant formula have been airlifted from Europe by military aircraft to Indianapolis, Indiana, through Operation Flying Formula, Biden said in a statement on social media on May 22. The milk powder is the first batch of infant formula approved by Biden to be shipped from Europe to the United States.


On May 21, local time, US President Joe Biden signed the 2022 access to Infant Formula Act during a visit to Asia. The access to Infant Formula 2022 Act aims to ensure that families in need in the United States can continue to buy infant formula with WIC benefits during supply chain problems such as public health emergencies or product recalls. WIC is a federal assistance program designed to provide special benefits and nutritional supplements for women, babies and children. The White House announced that the United States will ship about 1.5 million bottles of formula from Switzerland to Indiana for distribution this week.


The "milk powder shortage" in the United States has been going on for months.


According to CCTV news, the shortage of infant formula in the United States has been going on for several months. Data show that in the week to May 15, the shortage rate of infant formula in the United States was as high as 45%. The situation of "hard to get a can of formula" worries many American parents.


According to the analysis, there are three main reasons for the "milk powder shortage" in the United States.

  • 原因一:雅培关停工厂,垄断加剧断货危机

  • Reason 1: Abbott Laboratories shut down the factory, monopoly aggravated the out-of-stock crisis


According to several US media reports, earlier, consumers reported that four babies fell ill after eating Abbott Laboratories formula, three of them were infected with Cronobacter sakazakii and one was infected with Newport salmonella.


The US Food and Drug Administration (FDA) said that Cronobacter sakazakii could cause life-threatening septic infections or meningitis and could kill two of the babies.


Abbott Laboratories then recalled products in February and closed its largest manufacturing plant in Michigan. Since then, the shortage rate of American formula reached 30% at the beginning of April, rising to 40% at the end of the month, and the upward trend continued until May.


In fact, it is not uncommon for manufacturers to recall products or close factories, and most of these incidents do not cause serious shortages of related products on the market. The reason why the Abbott Laboratories incident led to a serious shortage of infant formula in the United States lies in the monopoly of the market.



△ Fortune Magazine reports


According to media reports such as Fortune magazine and the Wall Street Journal, a few manufacturers in the US infant formula market control almost all of the supply. According to a 2011 USDA report, Abbott Laboratories's market share in infant formula was about 43% 10 years ago, and that figure has barely changed since then. Abbott Laboratories's market share is about 42 per cent in 2021, with about 95 per cent of its products produced in the US.



△ USDA Survey report "winners eat almost all: how WIC affects the infant formula market"


In addition, a US policy distorts the industry in another way. The Ministry of Agriculture has a special organization called WIC, known as the Special Supplementary Nutrition Program for Women, infants and Children, which provides services for pregnant and lactating women and their young children. It is also the largest buyer of infant formula in the United States, and its exclusive procurement contracts are awarded to only a few approved formula companies. According to a 2011 USDA report entitled "winners eat almost all: how WIC affects the infant formula market", almost all sales of infant formula in the United States come from three companies, Abbott Laboratories, Mead Johnson and Garbo.

  • 原因二:新冠疫情影响下的供应链困境

  • Reason 2: the plight of the supply chain under the influence of COVID-19 epidemic


Us researchers have found that the COVID-19 epidemic has affected some of people's consumption habits, hoarding goods before entering the cycle of digesting inventory, which makes manufacturers' production plans difficult and the size of the market difficult to predict.



△ Reuters reported


The shortage of milk powder began in 2020, when Americans began hoarding milk powder as a result of the COVID-19 epidemic, and formula manufacturers increased production, but cut production in 2021 as demand slowed, Reuters reported.

美国咨询公司Demographic Intelligence的研究人员表示,2020年人们在囤积超量的奶粉后,市场需求开始下降,导致厂商在2021年减产;现在,随着2022年新生儿出生率的提高,新妈妈们需要更多的配方奶粉,订单激增的速度高于供应的恢复速度。

After people hoarded excess milk powder in 2020, demand began to decline, leading manufacturers to cut production in 2021, and now, with the birth rate rising in 2022, new mothers need more formula, and orders are surging faster than the recovery of supply, according to researchers at Demographic Intelligence, a US consulting firm.

  • 原因三:FDA反应迟缓,监管出现问题

  • Reason 3: slow response of FDA and problems in supervision


Us experts believe that the US Food and Drug Administration (FDA) is also partly responsible for the severe shortage of formula milk powder.


Scott, a professor at Georgetown University's Law Center, said FDA did not respond quickly to the whistleblower's report and they should have inspected the factory as soon as possible, Fortune magazine reported.



△ Congressman Rosa: FDA's response to the report was too slow.


Rosa de Lauro, a Democratic congressman, said FDA was too slow to respond to the report. The report about Abbott Laboratories's defective milk powder was submitted to FDA in October 2021, and it was not until late December 2021 that FDA contacted and questioned the whistleblower, and it was not until January 31, 2022 that FDA personally inspected Abbott Laboratories's factory, and the recall of the defective products was issued on February 17, 2022.


Edit / lydia

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