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P.M. BRIEFING : Baby Food Formula Firms Probed

May 29, 1990|From Times Wire Services

WASHINGTON — The Federal Trade Commission said today that it is investigating the baby formula industry to see whether the top producers are in collusion, sending prices much higher than they would otherwise be.

Abbott Laboratories, Wyeth Laboratories and Mead Johnson Co. control more than 90% of the U.S. formula market, where prices have risen 150% in the last decade, according to Sen. Howard M. Metzenbaum (D-Ohio).

Milk prices, a main formula component, rose only 36% in the same period.

"The infant formula industry may have some characteristics that make it conducive for collusive or oligopolistic firm behavior," Kevin Arquit, director of the FTC's Bureau of Competition, told a Senate Antitrust Subcommittee hearing chaired by Metzenbaum.

"The facts before us, relating to the infant formula industry, while limited, raise sufficient competitive questions that I have directed my staff to conduct an inquiry," Arquit said.

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