New York Attorney General Letitia James on Monday announced that her office secured more than $13,500 worth of baby formula from baby formula supplier Paragon USA & Co., LLC (Paragon) for families in Rochester. The donation is the result of an investigation conducted by the Office of the Attorney General (OAG) 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. Monday’s donation will be distributed to families in need across Rochester by Foodlink, a community organization that serves the Greater Rochester and Finger Lakes regions.
“During a nationwide baby formula shortage, Paragon took advantage of New York families, illegally raising the price on formula to squeeze extra profits,” said Attorney General James. “My office made sure Paragon was held responsible for their illegal action and guaranteed that hard-working families in New York received relief. I thank Foodlink and all its partner organizations for distributing this baby formula to help Rochester families in need.”
“We are thankful to Attorney General James for once again providing Foodlink and our new Health & Wellness initiative with additional baby formula,” said Julia Tedesco, President & CEO of Foodlink. “Our partners have highlighted a growing need for baby products and other essential items, especially as grocery prices remain historically high. This generous contribution will greatly benefit our members and their clients who are in urgent need of formula.”
In 2022, Abbott Laboratories closed one of its baby formula manufacturing plants and recalled formula produced there, creating significant hardship for families throughout New York and the nation as formula supplies dwindled and prices rose. Abbott produces over 40 percent of the infant formula sold in the United States, and the plant it closed was responsible for approximately 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 OAG’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 a result of a settlement with OAG, Paragon must pay penalties and make formula donations with a combined value of $45,000. This includes a $10,000 penalty to the state that Paragon has already paid and an additional $35,000 that can be paid in the form of donated formula or cash that must be delivered by June 10, 2025.
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