NY AG secures baby formula for Rochester in settlement in price-gouging case

New York Attorney General Letitia James announced Monday that her office secured more than $13,500 worth of baby formula from baby formula supplier Paragon USA & Co. LLC for families in Rochester.

The donation is the result of an investigation conducted by the AG’s office into Paragon for price gouging during the national baby formula shortage in 2022.

As part of a settlement with OAG, Paragon has paid a $10,000 penalty and must pay an additional $35,000 in donated baby formula, or cash.

The donation will be distributed to families in need across Rochester by Foodlink.

In 2022, Abbott Laboratories closed one of its baby formula manufacturing plants and recalled formula produced there, creating hardship for families throughout New York and the nation as formula supplies dwindled and prices rose.

Abbott produces more than 40 percent of the infant formula sold in the United States, and the plant it closed was responsible for about one fifth of total U.S. production.

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.

The AG’s investigation found that Paragon, which supplies formula to retailers in New York, generated tens of thousands of dollars in additional revenue by raising prices more than 20 percent after Abbott announced its recall.

As part of a $675,000 settlement with formula suppliers Marine Park and Formula Depot, James secured the donation of over $344,000 worth of baby formula to families in the Bronx in March, and $140,000 worth of formula to families in Rochester in December.