Government investigates infant-formula makers' prices

December 31, 1990|By New York Times

WASHINGTON The Federal Trade Commission has subpoenaed records of all leading manufacturers of infant formula, suspecting that they collaborated to raise prices.

"This is a top-priority, front-burner investigation," said Kevin J. Arquit, director of the commission's Bureau of Competition.

Infant formula is a key ingredient of the food packages given to low-income families under the Special Supplemental Food Program for Women, Infants and Children, or WIC. The program, acclaimed as one of the nation's more effective welfare programs, accounts for one-third of all sales of infant formula in the United States.

"State WIC programs are on a fixed budget," Arquit said in an interview last week. "We have not yet concluded that a violation of the law occurred."

When infant formula prices go up, the cost of a WIC food package increases, fewer people can be served and some people have to be removed from the rolls, "so there is real consumer injury," Arquit said.

The allegations were made by state welfare officials and consumer groups, which complain the three companies have raised prices in a uniform way for a decade.

The biggest makers of infant formula are Ross Laboratories, a division of Abbott Laboratories; the Mead Johnson Nutritional Group, a unit of the Bristol-Myers Squibb Co., and Wyeth-Ayerst Laboratories, a division of the American Home Products Corp.

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