- May 19, 2022
- Posted by: Bastion team
- Category: World News
The Senate Finance Committee will investigate Abbott Laboratories’ tax practices and stock buybacks amid an ongoing and exacerbating shortage of baby formula, chairman Sen. Ron Wyden (D-Ore.) announced Wednesday.
Why it matters: Wyden, in a letter to Abbott CEO Robert Ford, accused the company of using the “billions” its saved from the tax reforms passed by Republicans in 2017 for “padding the pockets of corporate executives and wealthy shareholders” and not “investing in critical upgrades to a plant essential to feeding our nation’s infants.”
- Wyden also questioned how the company was able to pay “a stunningly low effective tax rate that has averaged just under 12% over the last three years,”
The big picture: The baby formula shortage started in 2021, following production problems and distribution issues stemming from the pandemic.
- But the shortage was significantly exacerbated when Abbott, one of the largest suppliers for baby formula in the U.S., recalled several major brands of its formula after federal officials investigated four babies who suffered bacterial infections from baby formula made at the company’s factory in Sturgis, Michigan.
- The plant was forced to close over the recall, though the company this week reached an agreement with the Food and Drug Administration to reopen it, potentially paving the way for increased supply.
- About 3 in 4 babies are given formula within their first six months as a complete or partial substitute for human milk, as many women run…