Baby Formula ‘Crisis’ In The US Due To Worsening Shortages

Due to an increasing shortage of the special milk, major US pharmacies have banned sales of baby formula. In recent weeks, CVS and Walgreens have put limits on the number of cans customers can purchase at one time.

In February, Abbott, the maker of the top-selling Similac brand, shut down a key production and issued a recall after discovering contamination. The Biden administration is under increasing pressure to respond to the situation.

Senator Tom Cotton, a Republican, has labelled it a “national crisis” that the White House must handle. Democratic Representative Rosa DeLauro also expressed worry that the Food and Drug Administration, which supervises formula manufacturers, had responded “much too slowly” to the issue and reports of difficulties at the Abbott factory in Michigan, which is still shuttered.

Abbott, which supplies infant formula to several of the state government’s low-income women’s and children’s programmes, said it was working with regulators to reopen the plant.

It has been sending extra shipments from an Irish plant to try to address the problem, and it expects exports from Ireland to treble this year, according to the company.

“We know that our recent recall caused additional stress and anxiety in an already challenging situation of a global supply shortage,” the company said in a recent statement.

“We are working hard to help moms, dads and caregivers get the high-quality nutrition they need for their babies.”

In February, Abbott recalled some batches of powdered formula after allegations that four newborns who were fed from factory cans grew unwell, including two who died.

The Centers for Disease Control and Prevention said they were looking into a relationship, but that testing so far had revealed that the bacteria found at the plant did not match that found in the affected babies.

Abbott was also chastised by the FDA for working in filthy settings.

According to research firm Datasembly, which tracks 11,000 stores throughout the US, the shortfall predates those concerns and has been accumulating since last year due to supply chain and other causes.

Last month, the situation worsened as word of the crisis spread and parents rushed to stock up.

At a Target shop in Orlando, a completely empty baby formula display shelf can be seen. Baby formula has been in short supply in stores across the United States, prompting some chains to limit client sales.

According to Datasembly, the average out-of-stock percentage across the country had increased to 40% on April 24, up from just 30% a few weeks ago – and 11% in November.

According to the report, there were 26 states with out-of-stock rates greater than 40%, up from just seven states three weeks before.

“Due to increased demand and various supplier challenges, infant and toddler formulas are seeing constraint across the country,” the major pharmacy chain Walgreens said in a statement.

“We continue to work diligently with our supplier partners to best meet customer demands.”

Similar to other shops, Walgreens has limited families to purchasing three cans at a time. A 12.4 ounce can of formula usually lasts approximately 15 bottles, or roughly a few days’ supply.

Companies that produce things like baby formula, which have a stable demand over time, have problems making up when there is a disruption, according to Rudi Leuschner, head of Rutgers Business School’s masters in supply chain management programme.

And, he cautioned, when parents hurry to buy as word of bare shelves spreads, the problem will only become worse.

“It’s not a situation where you can just snap out of it,” he said. “It was designed to run at one speed.”

While this year’s formula deficit may have highlighted the supply chain’s vulnerability, Prof Leuschner cautioned that it may not be enough to justify backup reserves.

Overall, birth rates are declining, with the lowest levels ever recorded in the United States in 2020. Infant formula intake is also decreasing in favour of breast milk, according to studies.

(Adapted from BBC.com)



Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability

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