Similac brand no relation closure
Recall and plant shutdown
The problem was exacerbated when Abbott Labs, one of three major formula producers in the United States, shut down production at its Sturgis, Michigan plant in February 2022, following a Food and Drug Administration recall of several brands of formula due to possible bacterial contamination that may have caused at least two infant deaths. Abbott produces 40% of the formula sold in the US, mostly under the Similac brand, and the Sturgis facility is its largest. The bacterium which sickened the infants, Cronobacter sakazakii, was found at the Sturgis plant. The CDC performed whole genome sequencing on Cronobacter bacteria from two patient samples, and found that the samples were not closely related to strains collected in the Sturgis plant, or to each other. In a press release, Abbott cited the CDC report and stated, "there is no evidence to link our formulas to these infant illnesses". FDA officials disputed this claim, citing the shortage of genetic data on C. sakazakii in the CDC database, making identification and comparison of strains difficult, and the high likelihood of missed detection of all strains at the plant using the procedures currently in place. The CEO of Abbott apologized for the voluntary recall on May 22, stating that their voluntary recall had exacerbated the infant formula shortage in the US, while also stating that the voluntary recall was the "right thing to do."On June 10, the FDA stated that it was investigating reports that nine children died after consuming infant formula produced in the Sturgis plant, seven more than were previously acknowledged by the agency. In all nine reported fatalities, the agency was unable to identify the source of the infection. Abbott Nutrition maintained that no causal relationship had been established between its products and any of the reported infant deaths. The report was brought to the light by a FOIA request by eFoodAlert, a website for food safety information.Import restrictions
A trade analyst for the libertarian Cato Institute noted that infant formula is subjected to high tariffs as well as tariff-rate quotas (TRQs). An item subject to TRQs has some imports subject to a tariff, and over-quota excess subject to a tariff and additional duties, making it expensive to import. A provision of the 2020 United States–Mexico–Canada Agreement imposed new restrictions on imports of formula from Canada; the United States imported no baby formula from Canada in 2021.
The FDA also prohibits the import (for commercial purposes) and sale of formula from Europe in the US, even though many European formulas meet or exceed FDA nutritional guidelines, because their nutritional labeling does not conform to US requirements.Market concentration
Ninety percent of the formula in United States is made by just four companies, including Abbott Nutrition. Abbott manufactures 43% of US infant formula. Transportation Secretary Pete Buttigieg alleged that the industry's "enormous market concentration" may have exacerbated the problem. Senator Tammy Duckworth (D-IL) also urged the FTC to study whether market consolidation in the infant formula industry caused the shortage. According to Claire Kelloway of the Open Markets Institute, manufacturers operate a relatively small number of formula factories to increase efficiency and to reduce cost. But this creates lots of risk if a plant is closed, as happened with the Sturgis plant. FDA Commissioner Robert Califf acknowledged that the market concentration in the industry deserves more scrutiny. David Davis, a professor of economics at the South Dakota State University, has alleged that WIC (Special Supplemental Nutrition Program for Women, Infants, and Children) contracts help create monopolies that make it hard for other brands to break into the market. Davis stated that without WIC contracts, no player will be able to enter the industry. Davis stated that this kind of market concentration gives little flexibility if things go wrong, as one single plant will have a big impact on the industry.Efforts to restore production
On May 11, 2022, Abbott stated that it hoped to resume production at Sturgis in two weeks.On May 16, the FDA and Abbott Laboratories agreed on a consent decree on the steps needed to reopen the plant and restore production. The FDA expected Abbott to restore production in its Sturgis plant in two weeks. Under the decree, Abbott agreed to correct the unsanitary conditions that led to the bacterial contamination and plant closure. On May 17, the agreement was approved by a federal judge. The agreement will be valid for five years; if Abbott fails to comply with the agreement, the company will be subject to a fine of $30,000 for each day of violation, up to a maximum penalty of $5 million annually.Abbott expected that it would take six to eight weeks after the restart of production in its Sturgis plant for the product to reach consumers. Abbott stated that it had implemented new technologies in its manufacturing process, including an augmented reality system to aid the company in making manufacturing decisions. The company also stated that it has upgraded its environmental monitoring program and auto sampling technology, and is allowing its electronic records of batches to be accessed in real-time by its testing and monitoring teams. Abbott stated that its product testing "already meets or exceeds regulatory requirements."On June 4, production at the Sturgis plant restarted under the conditions laid out in the consent decree. Abbott estimated that it would take six to eight weeks before the facility would be back to full capacity.On June 16, production at the Sturgis plant stopped again after severe storms in southwestern Michigan flooded areas in the plant, further delaying formula production for a few weeks.
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