AG Letitia James: Price gouging companies to donate $675G in baby formula
The office of Attorney General Letitia James, above, announced the settlement with baby formula supplier Marine Park Distribution and its affiliate Formula Depot on Monday. Credit: AP / Bebeto Matthews
Baby formula companies that allegedly price-gouged during the 2022 national shortage have agreed to donate $675,000 of product and pay a $75,000 fine, according to the office of the state attorney general, Letitia James.
An investigation by her office found that supplier Marine Park Distribution Inc. of Brooklyn and its affiliate Formula Depot Inc. broke New York law by hiking prices during the shortage — at times to $36 a can from $18, the office wrote in a news release.
The donations and the fine settle allegations by the office. The donated formula will go first to an organization in Rochester that helps the needy, with forthcoming donations of the product to be distributed over the coming year elsewhere in the state.
The companies were found to have raised prices over 60% more than allowed by law, "generating hundreds of thousands of dollars more in revenue," the office said in the release. The companies are also barred from future price-gouging.
A woman who answered the telephone at Marine Park said she hadn't heard about the case, and a voicemail left with Formula Depot wasn't returned.
Earlier this year, Walgreens agreed to similar donations after James’ office accused the retailer of price-gouging formula during the shortage, which was caused by a global supply-chain crisis.
Her investigation found that Walgreens price-gouged on at least 20 kinds infant formula items.
"Walgreens raised retail prices by over 10 percent on those products. For some products, Walgreens’ price increase was over 20 percent, and in one case, it was over 70 percent," the office said. "The OAG’s investigation found that Walgreens made over 2,400 individual formula sales at these inflated prices, selling over 3,400 cans or bottles of formula and bringing in over $150,000 in revenue."
That settlement was $200,000 of baby formula, about 9,500 cans, and a $50,000 fine.
Matthew Chayes, a Newsday reporter since 2007, covers New York City.
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Newsday Live Music Series: Long Island Idols Newsday Live presents a special evening of music and conversation with local singers who grabbed the national spotlight on shows like "The Voice," "America's Got Talent,""The X-Factor" and "American Idol." Newsday Senior Lifestyle Host Elisa DiStefano leads a discussion and audience Q&A as the singers discuss their TV experiences, careers and perform original songs.
