USA– Abbott Laboratories, USA’s leading infant formula manufacturer, is facing investigations by the Securities and Exchange Commission (SEC), as well as the Federal Trade Commission, in relation to their infant formula business.

In a recent filing, Abbott disclosed that it has been subpoenaed by the SEC’s Enforcement Division in December 2022 requesting “information about its powder infant-formula business and related public disclosures.”

In January, the company also “received a civil investigative demand” from the FTC seeking information in connection with the agency’s investigation of companies that bid for infant formula contracts with the federal Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program through the USDA.

These investigations follow a US-wide infant formula shortage last year after the company was forced to recall large amounts of its infant formula products after a salmonella outbreak at its factory in Michigan.

Abbott recalled select Similac, EleCare and Alimentum as well as powdered infant formulas manufactured at the plant, and closed down the factory later that month when investigators found evidence of cronobacter sakazakii bacteria at the facility.

Abbott announces that it does not expect the new probes and inquires to have a financial impact on the company.

“While it is not feasible to predict the outcome of such pending claims, proceedings, and investigations with certainty, management is of the opinion that their ultimate resolution should not have a material adverse effect on Abbott’s financial position, cash flows, or results of operations.”

The company also faced investigations from the Department of Justice last month regarding the closure of its Michigan plant.

“The DOJ has informed us of its investigation, and we’re cooperating fully,” Scott Stoffel, Abbott’s Vice president of external communications, stated in an email to The Wall Street Journal.

If the DOJ’s consumer protection unit finds evidence of criminal violations at the company’s Michigan plant, Abbott could face fines of up to $500,000 per offence and up to a year of prison time for individuals involved.

There are 399 pending lawsuits against the company in federal and state courts regarding last year’s infant formula crisis with at least two dozen families now suing Abbott over the allegedly contaminated formula.

Abbott’s representatives however say there’s no conclusive evidence linking its formula to the infants’ illnesses, as none of the cronobacter strains found at their plant matched samples genetically sequenced from the sick infants.

The probe by US authorities follows a recent health expert analysis which called out major formula companies, Abbott included, for “exploitative” marketing and aggressive lobbying practices.

According to the report players in the infant nutrition industry are using exploitative and “underhand” marketing strategies that are influencing millions of mothers not to breastfeed.

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