Reckitt Benckiser expects baby formula shortage to continue into spring 2023

Yahoo Finance health care reporter Anjalee Khemlani shares the latest on the ongoing baby formula shortage and how it may extend into spring 2023.

Video Transcript

SEANA SMITH: One of the biggest suppliers of baby formula has a grim warning for parents. Reckitt Benckiser, maker of the brand Enfamil, saying that formula shortage will likely persist until this spring. That's according to a report from Reuters. Yahoo Finance's Anjalee Khemlani joins us now with the details. And Anj, what can you tell us as to why this is still the case?

ANJALEE KHEMLANI: Well, Seana, unfortunately, even the-- despite the fact that the US government put in a lot of effort, including enacting the Defense Production Act, as well as relaxing regulations, the FDA allowing more foreign export to come in of companies that hadn't previously been in the market, all of that still leading to a shortage.


Reckitt, as you know, maker of the Mead Johnson brand and now accounting for 50% of the baby formula market, is leading this and still has not been able to meet, despite increased production, a full shelf. And that's sort of where they're looking at, is whether or not the shelves are fully stocked and not emptying out as frequently as they were before. As you saw on your screen, other makers like Gerber, as well as Prurigo, which is another one that does sort of white label brands for Walmart and Amazon.

Meanwhile, Abbott, the reason why this shortage is still in effect, was previously 40%. And the market leader has lost ground to Reckitt since a recall last year, or earlier this year, rather, of its baby formula. It was a specialized formula that was contaminated in Michigan plants and had to be recalled. That has really been an ongoing problem. And despite the fact that that plant has restarted since, it still hasn't led to the level of production and level of supply that the country needs. And so despite the fact that the FDA continues to allow imports from abroad, it still isn't meeting demand.

SEANA SMITH: Yeah, and I've been buying a lot of baby formula over the last several months, and it's still very, very hard to find, sometimes. Anjalee Khemlani, thanks so much.