Dear Chair Khan:
I am writing to ask that the Federal Trade Commission consider using all of its available tools and authorities to actively monitor the infant formula market and address any illegal conduct that may be contributing to scarcity and hoarding as well as study whether rural or smaller retailers are being put at a disadvantage.
The supply of infant formula in the country has tightened over the last several weeks after the voluntary recall of products from one of the Nation’s largest production facilities. Retailers have largely and responsibly refused to hike prices on infant formula for young families, recognizing this good is critical to the health of children. Many retailers have taken the important step of limiting the number of infant formula containers someone can buy at one visit to prevent hoarding. This action has also helped to prevent predatory behavior by potential third party sellers who might try to take advantage of families.
Nevertheless, temporary shortages like this one create an environment where unscrupulous profiteers could try to purchase infant formula at regular prices at retail outlets and resell it at an exorbitant markup to families that cannot find formula, including through digital platforms. This not only takes advantage of families’ desperation for formula, but generates market scarcity that could contribute to empty store shelves for formula at trusted distributors and retailers. There have already been reports of such behavior in the media.
It is unacceptable for families to lose time and spend hundreds of dollars more because of price gougers’ actions. I therefore ask that the Commission further examine whether there is price gouging in infant formula occurring, thoroughly investigate complaints brought to you through channels such as your fraud hotline, and that you bring all of the Commission’s tools to bear if you uncover any wrongdoing. We know State attorneys general are also examining this issue and may be valuable partners in this effort.