NEW YORK, May 13 (Reuters) - Perrigo Company PLC,
which makes store-brand baby formulas for retailers, including
Walmart Inc and Amazon.com Inc, expects
shortages and heightened demand to last for the "balance of the
year," Chief Executive Murray Kessler told Reuters in an
The Biden administration this week has come under increasing
pressure to address a baby formula shortage, which has roots in
a February recall of some formulas by one of the nation's main
manufacturers, Abbott Laboratories.
"We have stepped up and are killing ourselves to do
everything we can," Kessler said.
Perrigo's formula manufacturing facilities in Ohio and
Vermont are now running at 115% of capacity, Kessler said.
At the request of the U.S. Food and Drug Administration,
Perrigo is focusing on four items, the store-brand versions of
Similac Pro Sensitive and Pro Advance and Enfamil Gentle Ease
and Infant, Kessler said.
The company added that it is making other formulas as well.
It also has a smaller business making some national formula
brands, including Bobbie.
The closure of Abbott's infant-formula plant in Sturgis,
Michigan, exacerbated national pandemic-related shortages,
leading to empty shelves in big box stores and supermarkets and
panicked parents. Abbott's brands include Similac formulas.
Perrigo is working with retailers including Walmart and
Target Corp so they "get something each week," Kessler
said. Retailers' allocations are based on an average of what the
retailers received prior to "this crisis," he said.
Some retailers including CVS Health Corp and Target
are rationing baby formula.
The White House on Thursday announced steps it is taking to
alleviate the shortage, including permitting more imports.
President Joe Biden said on Friday he expects more formula on
shelves in weeks.
French food and beverage company Danone SA, which
also makes infant formulas, said the "unexpected Abbott
Nutrition recall in February has led to a surge in demand in the
"We are in discussions with the U.S. authorities to see how
we can support them in addressing their shortages.
Of the total U.S. baby formula market, Perrigo makes up
roughly 8%, Kessler said, adding that it has gained share as it
has worked to satisfy the soaring demand.
Due to "massive inflation," Perrigo raised prices by about
3% in the first quarter, Kessler said.
The company has ordered materials to meet the heightened
level of demand throughout the year, he said.
Bobbie, a European-style infant formula new to the market,
saw its customer count double the first week after the recall of
Abbott formulas, and it has continued to climb, CEO Laura Modi
Perrigo manufacturers Bobbie's formula, but can only meet
about 50% of the company's demand, Modi said, leading it to stop
taking new customers. Perrigo can meet 100% of Bobbie's current
customer needs, she said.
Bobbie has about 70,000 customers.
Abbott closed its manufacturing facility in Michigan after
complaints of bacterial contamination.
The FDA later cited five bacterial infections reported in
babies given the company's formula, including two deaths. Abbott
has said its plants are "not likely the source of infection" and
is planning on re-opening the facility in the next two weeks.
(Reporting by Jessica DiNapoli in New York and Richa Naidu in
Editing by Nick Zieminski and Marguerita Choy)