Baby formula production in the country took another hit this week. A powerful storm slammed Michigan and other states earlier this week and flooded an essential baby formula manufacturing plant in Michigan.
The announcement from Abbott Laboratories came after the monthslong closure of the same plant in Sturgis prompted a severe shortage in formula products across the United States. Production of EleCare and other specialty and metabolic formulas had restarted at the Sturgis plant on June 4.In a statement Wednesday, the company said it stopped production of EleCare after a torrential storms overwhelmed the city’s stormwater system and flooded parts of the plant.In a statement Wednesday, the company said it stopped production of EleCare after a torrential storms overwhelmed the city’s stormwater system and flooded parts of the plant.
The plant’s production will be impacted for weeks due to the flood, as indicated by the official Abbott statement. The reason: The facility needs to be cleaned, sanitized, and get a thumbs-up from the Food and Drug Administration (FDA).
“As a result, Abbott has stopped production of its EleCare specialty formula that was underway to assess damage caused by the storm and clean and re-sanitize the plant. We have informed FDA and will conduct comprehensive testing in conjunction with the independent third party to ensure the plant is safe to resume production. This will likely delay production and distribution of new product for a few weeks.”Abbott said that once the plant is re-sanitized and production resumes, it will restart EleCare production, followed by specialty and metabolic formulas. New formula being produced since the plant reopened was not yet available to consumers, and production had not started on popular brands available at grocery stores. Abbott said it will “work to restart Similac production at the plant as soon as possible.”In tweets Wednesday night, US Food and Drug Administration Commissioner Dr. Robert Califf said, “We know Abbott is working quickly to assess the damage and will be reporting its progress to us in the days ahead. Once the company establishes a plan, FDA will be back in the facility working to ensure that they can restart producing safe and quality formula products quickly.”
During a US Senate hearing, a Cato Institute economist had the following assessment: I haven’t seen an industry this fragile.
Scott Lincicome, director of general economics for the libertarian non-profit research firm, told members of a Senate subcommittee for antitrust that poor federal trade policies fostered Abbott’s market dominance — ultimately leading to the nation’s critically low supply of infant formula.“I’ve been looking at supply chains for the last two plus years…and I haven’t seen an industry this fragile,” Lincicome said. “It is about a textbook case of what happens when you put walls around the country and block all the imports, and then have a government contractor as a monopsonist in the market… it’s a perfect storm for problems.”
Stay tuned. There are likely to be more competitors for the title of “most fragile industry” during Biden’s administration.
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