Claire Kelloway of the Open Markets Institute no relation 2021-2022 global supply chain crisis
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.
no relation