Wall Street is plunging into the abyss, war is raging in Europe, China is threatening, but Joe Biden has had another major concern for the past few weeks: the protection of infants. For more than three months, America has been facing a growing shortage of infant milk. If the labels fly away on the fruit and vegetable departments of Walmart, those of baby milk are desperately empty. A disaster for all mothers who do not breastfeed their newborns, forced to search the Internet for recipes for random and sometimes dangerous mixtures, according to pediatricians, to feed their offspring.
Also, faced with this situation, which evokes the Moscow supermarkets of the Soviet era, the President of the United States for a time abandoned his arms deliveries to Ukraine to win the powdered milk war. For this, he unearthed an old decree dating from the Iron Curtain, the Defense Production Act, in order to launch the “Fly Formula” operation: an airlift intended to accelerate the imports of infant milk, mainly from Europe.
Seizure of the logistic machine
This incredible crisis was born of the double shortage of raw materials and labour. This is not very original at the moment, since this situation is the first reason for price inflation which could well plunge America into recession. But in the case of infant milk, this seizure of the logistics machine was coupled with a major administrative glitch. Following the death of two infants in February, the American administration, suspecting the infant formula produced by the sector giant Abbott, ordered the closure of its factory in Sturgis (Michigan). Since then, stockouts have piled up. The grievances have been lifted, but other compliance concerns are still blocking recovery.
How is it that the shutdown of a single factory can cause such a catastrophe? Because the production of infant formula is both very concentrated and very national. Three producers – Abbott, Gerber (subsidiary of Nestlé) and Reckitt – hold 95% of the market and production is 98% national. At a time when competition and globalization are becoming dirty words and when many are dreaming of industrial relocation, Joe Biden finds himself forced to write to his ministers of health and agriculture to ask them “to take all possible measures to import more baby milk”. In the end, logistical, food or health security does not go so well with a closed world, controlled by a few oligopolies.
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