Attorney General James Uses Significant Formula Donation to End Price Gouging Investigation
(WNY News Now) After a price gouging investigation into Marine Park Distribution Inc. and its partner Formula Depot Inc., New York Attorney General Letitia James has secured $675,000 worth of infant formula for families throughout the state.
NEW YORK In response to illegal price gouging during the 2022 nationwide formula shortage, New York Attorney General Letitia James announced Monday that her office had obtained $675,000 worth of baby formula for New Yorkers from formula supplier Marine Park Distribution Inc. (Marine Park) and its affiliate Formula Depot Inc. (Formula Depot). According to an Office of the Attorney General (OAG) inquiry, Marine Park and Formula Depot violated New York’s price gouging laws by raising formula prices during the shortage. Marine Park occasionally quadrupled the price of a can of formula, charging its patrons up to $36 for a can that had previously cost $18. To make baby formula available to those in need in New York, Attorney General James negotiated a compromise. Foodlink and its affiliated groups in Rochester will receive the first infant formula contribution from this settlement, with more to follow throughout the upcoming year. Marine Park and Formula Depot also paid a $75,000 penalty and donated baby formula.
Attorney General James stated that parents should never have to be concerned about unjust price increases endangering their kids’ next meal. Profiteering corporations took advantage of the baby formula crisis in 2022, when families nationwide especially in New York were having difficulty finding and affording sustenance for their infants. My office will be providing hundreds of cans of infant formula to underprivileged New Yorkers as a result of our inquiry. I’ll keep targeting businesses that overcharge for necessities and exploit hard-working families, particularly in times of distress.
In the United States, formula is used by the great majority of newborns. During the first six months of their lives, three-quarters of newborns in the United States are fed infant formula in some capacity. Due to contamination concerns, Abbott Laboratories, a significant baby formula maker that at the time manufactured more than 40% of the formula sold in the United States, closed a manufacturing facility in February 2022 and recalled a number of its well-known Similac formula brands. For a large portion of 2022, there was a serious infant formula shortage as a result of the facility closure and recall. Families in New York were forced to pay much higher costs for the formula they could obtain, battled to locate available formula, and faced the possibility of running out of formula completely as a result of the scarcity.
During market disruptions like the 2022 formula shortage, New York’s price gouging statutes forbid vendors from unreasonably raising the prices of commodities that are essential to consumers’ health, safety, or welfare. Attorney General James warned over 30 stores throughout the state in May 2022 to stop overcharging for baby formula after customers complained about excessively high costs.
According to an OAG inquiry, Formula Depot, which sells to consumers online, and Marine Park, which sells formula to stores, in certain cases increased prices by more than 60 percent beyond the legal limit during the scarcity, resulting in hundreds of thousands of dollars more in revenue. A customer who trusted Formula Depot to provide formula safe for infants with soy and milk allergies purchased a case of formula for $190, but a few weeks later, they were billed $245 for the same case.
As part of the settlement, Marine Park and Formula Depot are required to supply $675,000 worth of infant formula, which OAG will then give to underprivileged New Yorkers by November 2025. The two businesses have also paid a $75,000 fine to the state and are prohibited from price gouging in the future.
Leading the charge to defend New York consumers and prevent price gouging has been Attorney General James. A multistate group led by Attorney General James called on lawmakers to approve a nationwide prohibition on price gouging in October 2024. March andAs part of a deal with Walgreens for price gouging during the formula shortage, Attorney General James gave more than 9,500 cans of infant formula in Buffalo and New York City in April 2024. Attorney General James obtained a $100,000 settlement with Quality King Distributors, Inc. in May 2023 as a result of unreasonable Lysol product price rises in the early stages of the COVID-19 epidemic. Attorney General James introduced price gouging regulations in March 2023 to shield small businesses and consumers from corporate profiteering. The regulations would make the price gouging legislation in New York more strictly enforced. As part of a deal with the biggest egg producers in the country to stop price gouging in the early months of the pandemic, Attorney General James distributed 1.2 million eggs to food banks across the state in April 2021.
New Yorkers can file a complaint online or give the OAG a call at 800-771-7755 to report possible price gouging issues.
Assistant Attorney General Benjamin C. Fishman handled this case under the direction of the Consumer Frauds and Protection Bureau’s Deputy Bureau Chief Laura J. Levine and Bureau Chief Jane M. Azia. Under the direction of former Director Megan Thorsfeldt, Deputy Director Gautam Sisodia, and Director of Research and Analytics Victoria Khan, former Data Scientist Jasmine McAllister also provided assistance in this regard. First Deputy Attorney General Jennifer Levy is in charge of the Division for Economic Justice, which includes the Consumer Frauds and Protection Bureau. Chief Deputy Attorney General Chris D. Angelo leads this division.