US baby formula producer reaches deal to resume production amidst shortage

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Amid a US shortage of baby formula, the FDA reached an agreement on Monday with a major manufacturer to resume production, although it will take weeks to get the critical product back on store shelves.

The “consent decree” outlines steps needed to restart production at Abbott’s plant in Michigan, shutdown due to a recall, the company said in a statement.

“Once the FDA confirms the initial requirements for start-up have been met, Abbott could restart the site within two weeks,” the statement said.

However, the company cautioned that “From the time Abbott restarts the site, it will take six to eight weeks before product is available on shelves.”

Abbott, which produces the popular Similac brand used by millions of American families, announced a voluntary recall on February 17 after the death of two babies.

US families have grown increasingly desperate for formula amid a perfect storm of supply chain issues and the massive recall.

The average out-of-stock rate for baby formula hit 43 percent earlier this month, according to Datasembly, which collected information from more than 11,000 retailers.

Abbott’s agreement with the FDA to restart production at the plant in Sturgis, Michigan also needs to be reviewed by a federal court after the Justice Department filed a complaint on Monday.

The complaint says the facility “failed to comply with regulations designed to ensure the quality and safety of infant formula, including protection against the risk of contamination from bacteria.”

“The actions we are announcing today will help to safely increase the supply of baby formula for families,” US Attorney General Merrick Garland said in a statement.

Robert Ford, chairman and chief executive officer of Abbott said regretted the situation and said the company already had begun working on “working to implement improvements and take corrective action.”

“We know millions of parents and caregivers depend on us and we’re deeply sorry that our voluntary recall worsened the nationwide formula shortage,” he said in the statement.

The scarcity is the latest crisis to confound President Joe Biden’s push to get the US economy on sound footing amid the highest inflation in four decades and the ongoing global supply chain bottlenecks.

The United States produces about 98 percent of the formula it consumes, and the Biden administration plans to increase imports.



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