Air Freight News

Baby-formula makers tell Biden they foresaw dire shortages

President Joe Biden defended his administration’s response to a national baby formula shortage, saying he acted as soon he became aware of the crisis in April—even as manufacturers told him Wednesday they saw it coming months earlier.

“We knew from the very beginning that this would be a very serious event,” Robert Cleveland, senior vice president for North America and Europe nutrition for Reckitt Benckiser Group Plc, told Biden at a White House meeting.

Biden and the FDA have drawn criticism from lawmakers in both parties for the government’s slow response to the shortage, which began with supply-chain turmoil caused by the pandemic but was exacerbated after Abbott Laboratories recalled formula in February and shut down a Michigan factory over contamination fears.

Biden has said the government may have responded more quickly “if we’d been better mind readers.” But several of the executives participating in a meeting with the president at the White House on Wednesday told him they foresaw problems as soon as Abbott issued its recalls. The company is one of the largest formula suppliers in the US.

Murray Kessler, chief executive officer of Perrigo Co. PLC, told Biden that when his firm learned of Abbott’s recalls, executives “could foresee that this was going to create a tremendous shortage.”

Biden again defended his administration’s response after the meeting, saying that “once we learned of the extent” of the plant shutdown “and how broad it was, we kicked everything into gear.”

After a reporter pointed out that the formula executives had just told him they foresaw the impact of the shutdown, Biden responded: “They did. I didn’t.”

“Here’s the deal,” he said. “I became aware of this problem sometime in early April, about how intense it was. We did everything in our power from that point on.”

White House Press Secretary Karine Jean-Pierre told reporters in a briefing that she didn’t know whether the formula manufacturers had contacted the administration about their concerns before April.

“I don’t have the timeline on that,” she said. “All I can tell you, as a whole-of-government approach, we have been working on this since the recall.”

She referred back to Biden’s own statement about when he learned of the crisis. “I’m not saying when the president knew or didn’t know,” she said.

And she said she could not say who had alerted Biden himself to the magnitude of the shortage in April without first having “a conversation” with the president.

Ahead of the meeting, the White House announced two additional rounds of formula imports to the US. UK manufacturer Kendal Nutricare will supply the equivalent of 3.7 million bottles and Bubs Australia will send the equivalent of about 4.6 million bottles. The formula will arrive at several US airports over the next three weeks, the Biden administration said.

“As a father and a grandfather—and I’m sure we all feel this way—I understand how difficult this shortage has been for families all across the country,” Biden said during the virtual meeting with formula manufacturers. “There’s nothing more stressful than when you can’t get what your child needs.”

The plight of parents struggling to feed their children in one of the wealthiest nations in the world is the latest crisis to buffet the White House, on top of persistent rising prices, Covid-19, Russia’s invasion of Ukraine and gun violence. The administration was slow to respond after the Abbott Labs shutdown exposed weaknesses in the country’s food supply chain. Lawmakers of both parties have responded with outrage, demanding the Food and Drug Administration explain its delay and act swiftly to restore supplies.

The White House has been playing catch-up on a dire situation for parents of babies and medically vulnerable kids. Biden has used a law allowing him to nationalize production to make sure formula manufactures can obtain raw materials ahead of other customers, and created a program called “Operation Fly Formula” to import supplies from other countries with strong regulatory oversight.

Earlier Wednesday, the Agriculture Department announced $2.1 billion in new funding to bolster food supply chains, including initiatives to expand small- and mid-sized formula processing plants.

Abbott Labs did not attend the meeting with Biden. In addition to Cleveland and Kessler, executives of ByHeart Inc., Bubs Australia and Gerber Products Co. participated.

A White House spokesperson said Abbott was not part of Biden’s meeting with CEOs and leaders because the president is focused on ramping up production and providing safe infant formula to American families. The companies participating in Wednesday’s meeting are a subset of those working with the administration to increase supply whether it be through the Defense Production Act, Operation Fly Formula and the FDA’s importation guidance, the spokesperson said.

Abbott did not immediately respond to a request for comment.

The formula shortage took a dramatic turn for the worse last month, according to data on 130,000 stores. Out-of-stock rates spiked to 70% nationally for the week ending May 21, up from 45% the prior week, based on data from the retail-tracking firm Datasembly.

More than two-thirds of states had shortage rates over 70%, with California, Missouri, Minnesota, Nevada, Montana, Louisiana, Arizona and Utah over 80%, and Utah hit hardest at 89%, up from 49% a week earlier.

The shortage is particularly acute in some large cities, including Houston, where out-of-stock rates skyrocketed to an alarming 90%, up from 56% a week earlier.

San Francisco and Sacramento, which previously had some of the lowest out-of-stock rates at 31% and 32% respectively, saw their shortage rates spike precipitously last week, to 87% and 88%.

Federal and local regulators have taken steps to try to increase supply. In addition to the importation program, the FDA announced this week that it would ease import rules. At the local level, some cities and states are enacting provisions to prevent price gouging.

Brian Deese, Biden’s top economic adviser, said on CNN’s “State of the Union” last week that a recent shipment of 70,000 pounds of baby formula to Indianapolis represents 15% of the overall national volume needed and more is on the way.

Cleveland told Bloomberg last week that the company was attempting to gain FDA clearance to send Enfamil infant formula from its factories in Mexico and Singapore to the US. Mead Johnson is a unit of Reckitt Benckiser Group.

Cleveland said he anticipated Mead Johnson would need air freight assistance from the US government to quickly send the product from Singapore and that it would be blended and packaged in the US. He said the company would be able to send 200 metric tons of formula from Singapore in the first month and 500 metric tons in following months, and could possibly send more from its Mexico facility.

Cleveland said Wednesday that, in the meantime, the company is now delivering product to market 40% faster than it was prior to the recall.

Bloomberg
Bloomberg

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© Bloomberg
The author’s opinion are not necessarily the opinions of the American Journal of Transportation (AJOT).

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