New York Attorney General Letitia James secured 9,564 cans of baby formula, with a wholesale value of $200,000, to resolve an Office of the Attorney General (OAG) investigation into Walgreen Co. (Walgreens) which illegally raised prices of baby formula during the 2022 shortage. The OAG investigation into Walgreens price gouging of baby formula follows reports and consumer complaints about unreasonably high costs associated with this essential product. Attorney General James secured the Walgreens settlement in the form of baby formula to make it available to New Yorkers in need. In addition to the over 9,500 cans of baby formula, Walgreens will pay a $50,000 penalty to resolve the OAG investigation.
“Baby formula is the main source of nutrients and absolutely essential for thousands of our most vulnerable residents, our infants. During the formula shortage, families were panicked and struggling about how to feed their babies. For Walgreens to take advantage of this crisis and jack up formula prices is not only illegal, but downright shameful,” said Attorney General James. “The thousands of baby formula cans secured by my office will go directly to help New York families who need it most. Today's agreement should also send a clear message that my office will not tolerate any company that attempts to price gouge our state’s consumers.”
As part of the settlement with OAG, Walgreens will donate 9,564 cans of baby formula to the Met Council in Queens County, and FeedMore WNY and the Buffalo Prenatal Perinatal Network in Buffalo, Erie County. These nonprofits will distribute the formula to New Yorkers in need. Additionally, Walgreens will pay a $50,000 penalty, and will refrain from any future price gouging.
In February 2022, major baby formula manufacturer Abbott Laboratories, facing contamination concerns, shut down a plant that produced approximately 20 percent of the country’s formula and recalled several of its popular Similac formula products. The Abbott plant closure and recall contributed to a severe nationwide shortage of baby formula, which was already in short supply due to supply-chain problems caused by the COVID-19 pandemic. This acute shortage lasted through much of 2022 and led to emergency action by the federal government and state and local governments around the country. Millions of infants in the U.S. are reliant on formula as their primary or supplemental food source, and the 2022 shortage created significant hardship for families across New York State.
New York’s price gouging law prohibits vendors from unconscionably increasing prices on goods that are vital to consumers’ health, safety, or welfare during abnormal 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 triggered by consumer reports found that Walgreens engaged in price gouging on at least 20 infant formula products. In the months after the Abbott recall, 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 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.
Attorney General James has been a leader in the fight to protect New York consumers and guard against price gouging. 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. Throughout the pandemic, during major disruptions, and ahead of declared disasters, Attorney General James has issued consumer warnings against price gouging on essential supplies.
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. Data Scientist Jasmine McAllister also assisted in this matter, under the supervision of former Directors Jonathan Werberg and Megan Thorsfeldt and Acting Director Gautam Sisodia, all of the Research and Analytics Department. 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.
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