Monday, Jan. 14, 1991
Business Notes
When most people gaze at a newborn child, they see a bundle of joy. The makers of infant formula see something else: a bundle of loot. That's the argument of industry critics who claim that the leaders of the $1.5 billion formula business have unfairly boosted their prices 150% during the 1980s. Last week the state of Florida filed a lawsuit in federal court against the top U.S. formula makers: Abbott Laboratories (maker of Similac), American Home Products (Nursoy) and Bristol-Myers Squibb (Enfamil). The civil suit accuses the companies of fixing and inflating formula prices.
Antitrust accusations have dogged the firms for months. In a congressional hearing last May, Senator Howard Metzenbaum of Ohio denounced the price increases and their "devastating" impact on government programs that buy infant formula for low-income families. Metzenbaum's hearing spurred a still active investigation by the Federal Trade Commission. The companies deny that any conspiracy took place.