I thought I knew the major government contributors to the baby formula crisis. But the following 3 paragraphs say something new to me:
Control is a major factor as only four large formula producers control most of the US market. First, WIC-assisted parents are only allowed to choose certain brands. Second, consumers must pay a 17.5 percent tariff on any imported formula, which determines the value of numerous brands outside the U.S. market. This is an excellent arrangement for companies – and for their lobbyists – but it raises prices for families and makes it difficult to increase supply in times of scarcity.
When new formulas enter the market, regulations prohibit sellers from informing anyone about them for 90 days, and even manufacturers may advertise existing formulas of their choice. The first months on the shelf are a make-or-break for many new products, which is why existing producers prefer otherwise meaningless controls. At such times, parents may appreciate hearing about new options.
One of these options is the Toddler Formula, which in many cases meets the nutritional requirements of the Food and Drug Administration for infant formula. However, FDA regulations prohibit many manufacturers from recommending this option.
It comes from Ryan Young, “Cronyism Makes the Baby Formula Shortage Worse,” AIERMay 24, 2022.
The 90-day ban is objectionable.
Read the whole thing.
HT2 Donald Boudrox.