WASHINGTON D.C.: On its website, the US Federal Trade Commission (FTC) has said it is probing Abbott Laboratories and other companies that manufacture baby formula for potentially colluding in bidding for state contracts.
First reported by the Wall Street Journal, a document posted online reported that the FTC is looking into whether the companies "engaged in collusion or coordination with any other market participant regarding the bidding."
In 2022, the FTC began investigating potential collusion or coordination in bids to provide formula for the US Department of Agriculture's Women, Infants and Children program, which provides free formula to low-income families.
Studies showed that in addition to the money made from the contracts, the winning bids usually led to improved commercial sales.
Written by FTC Commissioner Alvaro Bedoya, the document stated, "Although the boost in non-Women, Infants and Children program sales motivates manufacturers to win Women, Infants and Children contracts, it may also create incentives to engage in collusive or coordinated market allocation, whereby incumbent Women, Infants and Children contract holders agree not to bid against each other."
The antitrust agency also requested information about the companies' formula sales outside of the program.
An Abbott spokesperson said that the company was cooperating with the FTC's requests, stating, "Abbott is unaware of any factual basis to support the Women, Infants and Children-related investigation, and staff have not identified any reason to believe that Abbott or any of its competitors have coordinated or colluded regarding any Women, Infants and Children contract."
Nestle, maker of Good Start infant formulas, also said the FTC has requested information.
"We, like other companies, received a civil investigative demand related to the Women, Infants and Children contract bidding process and have responded to the FTC," a Nestle spokesperson said.