State Attorney General Letitia James was in Buffalo Friday to deliver an unusual settlement payment in her price-gouging case against Walgreens – 4,668 cans of baby formula to be distributed to families in Western New York.
James sued Walgreens for unlawfully raising the price of baby formula at its stores during the 2022 shortage at the height of the Covid-19 pandemic after Abbott Laboratories stopped making formula for several months due to harmful bacteria found in its products.
“Here in Erie County, a can of formula that usually sells for $44.99 was being sold for $59.99,” James said. “This was blatant price gouging and price gouging is illegal.”
More than 40% of baby formula sold in the U.S. is made by Abbott, so its temporary shutdown and recall created a shortage from February 2022 until it resumed production in October 2022.
While the federal and state governments invoked emergency provisions to ensure an adequate supply of baby formula, Walgreens marked up its baby formulas throughout the “market disruption,” according to James’ lawsuit.
In May 2022, James issued warnings to more than 30 retailers across the state to stop overcharging for baby formula after consumers reported unreasonably high prices. Consumer complaints triggered an investigation by the AG’s office that found Walgreens engaged in price gouging on at least 20 infant formula products.
For some products, Walgreens’ price increase was over 20%, and in one case, it was over 70%, James said. The investigation found Walgreens made over 2,400 individual formula sales at the inflated prices, selling over 3,400 cans or bottles of formula and bringing in over $150,000 in revenue.
By September 2022, one-third of U.S. households with an infant younger than 1 year old said they had trouble finding formula, according to a survey conducted by the U.S. Census Bureau. This was true for 40% of adults with household incomes less than $75,000, the lawsuit…
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