Attorney General James Secures $675,000 of Baby Formula for New Yorkers in Need

December 16, 2024

NEW YORK - New York Attorney General Letitia James today announced that her office secured $675,000 worth of baby formula for New Yorkers from formula supplier Marine Park Distribution Inc. (Marine Park) and its affiliate Formula Depot Inc. (Formula Depot) for illegal price gouging during the nationwide formula shortage in 2022. An investigation by the Office of the Attorney General (OAG) found that Marine Park and Formula Depot raised prices of formula during the shortage in violation of New York's price gouging laws. At times, Marine Park doubled the price of a can of formula, charging its customers up to $36 for a can of formula that cost $18 before the shortage. Attorney General James secured a settlement in the form of baby formula to make it available to New Yorkers in need. The first donation of baby formula from this settlement will be made to Foodlink and its partner organizations in Rochester, and subsequent donations will be made over the coming year. In addition to donating baby formula, Marine Park and Formula Depot paid a $75,000 penalty.

"Parents should never have to worry about unfair price spikes putting their children's next meal at risk," said Attorney General James. "In 2022, when there was a baby formula crisis and families across New York and the country were struggling to find and afford food for their infants, profiteering companies took advantage. As a result of our investigation, my office will be delivering thousands of cans of baby formula to support New Yorkers in need. I will continue to go after companies that price gouge essential goods and take advantage of hardworking families, especially during a crisis."

The vast majority of infants in the U.S. are reliant on formula. Three quarters of U.S. infants are at least partially fed infant formula during the first six months of their lives. In February 2022, Abbott Laboratories, a major baby formula manufacturer that produced over 40 percent of the formula sold in the U.S. at the time, closed a manufacturing plant due to contamination concerns and recalled several of its popular Similac formula products. The plant closure and recall led to a severe shortage of baby formula that lasted for much of 2022. As a result of the shortage, New York families struggled to find available formula, faced the prospect of running out of formula entirely, and were often forced to pay much higher prices for the formula they could find.

New York's price gouging laws prohibit vendors from unconscionably increasing prices on goods that are vital to consumers' health, safety, or welfare during market disruptions such as the 2022 formula shortage. In May 2022, Attorney General James issued warnings to more than 30 retailers across the state to stop overcharging for baby formula after consumers reported unreasonably high prices.

An OAG investigation revealed that Marine Park, which sells formula to retailers, and Formula Depot, which sells to consumers online, in some cases raised prices over 60 percent more than was allowed under the law during the shortage, generating hundreds of thousands of dollars more in revenue. One consumer, who relied on Formula Depot for formula safe for babies with milk and soy allergies, bought a case of formula for $190, only to be charged $245 for the same case several weeks later.

Under the settlement, Marine Park and Formula Depot must provide $675,000 of baby formula that OAG will donate to New Yorkers in need by November 2025. In addition, the two companies are barred from future price gouging and have paid a $75,000 penalty to the state.

Attorney General James has been a leader in the fight to protect New York consumers and guard against price gouging. In October 2024, Attorney General James led a multistate coalition urging congressional leaders to support a national ban on price gouging. In March and April 2024, Attorney General James distributed over 9,500 cans of baby formula in Buffalo and New York City from a settlement with Walgreens for price gouging during the formula shortage. In May 2023, Attorney General James secured a $100,000 settlement with Quality King Distributors, Inc. due to unconscionable price increases for Lysol products during the early days of the COVID-19 pandemic. In March 2023, Attorney General James announced price gouging rules to protect consumers and small businesses from corporate profiteering. The rules would strengthen enforcement of New York's price gouging law. In April 2021, Attorney General James delivered 1.2 million eggs to food pantries throughout the state which were secured as part of an agreement with the nation's largest egg producers for price gouging in the early months of the pandemic.

New Yorkers should report potential concerns about price gouging to the OAG by filing a complaint online or calling 800-771-7755.

This matter was handled by Assistant Attorney General Benjamin C. Fishman, under the supervision of Bureau Chief Jane M. Azia and Deputy Bureau Chief Laura J. Levine, all of the Consumer Frauds and Protection Bureau. Former Data Scientist Jasmine McAllister also assisted in this matter, under the supervision of Director of Research and Analytics Victoria Khan, Deputy Director Gautam Sisodia, and former Director Megan Thorsfeldt. The Consumer Frauds and Protection Bureau is a part of the Division for Economic Justice, which is led by Chief Deputy Attorney General Chris D'Angelo and is overseen by First Deputy Attorney General Jennifer Levy.