Washington (Reuters) – Baby formula shortages look like they are going to worsen. Abbott Laboratories (ABT.N) has had to shut down a plant due to bacterial infections in babies, and on Wednesday the Food and Drug Administration said that it was investigating a new report of another death. It’s a cry for help for a broken market.
U.S. tariffs, along with regulation, have given domestic manufacturers like Abbott a near-monopoly on baby formula supply. The average cost of some imported formulas is three times more expensive than an Abbott brand, based on Congressional Research Service data. As a result, pressures on the market only seem to help Abbott. After the FDA said on Wednesday it received a report of another child’s death, its shares closed slightly up, and the stock continued to rise on Thursday.
The company said there is no current evidence that its products caused the death, and the White House has prodded overseas producers to prioritize U.S. orders. Still, if problems continue with Abbott products, consumers are scrambling, and in the end, forced to pay more. Instead, tariffs need to be scrapped and quality control on the product needs to be tightened. (By Gina Chon)