Baby Formula: How Theft-Rings Impact an Entire Generation

By: M. Claire Donnelly

Think you can still walk into a store and grab a can of baby formula for your child?  Televisions, laptops, and phones are not the only popular items disappearing from retail shelves.  Over the past few years, baby formula theft has become an increasing problem nationwide.  Now, many stores have baby formula behind the counter or with anti-theft devices attached to it.  According to one newspaper: “stores are worrying less about teens stealing CDs than about … [organized theft of] millions of dollars of baby formula…”  Major retailers such as Wal-Mart, Kroger, and Walgreens report losing millions due to theft of this product.  The Food Marketing Institute reported that baby formula was the fourth most-often-shoplifted good as early as 2004.  These thefts have caused many issues to arise in how mothers can get a simple can of baby formula to nourish their child.  Thus, not only has this placed a significant financial impact on struggling mothers, but also health concerns have arisen.

What is causing baby formula to be hot-ticket item?

Baby formula, which costs on average $24 per can, can cost a family up to $175-200 a week to feed one baby.  The product is necessary to simulate milk for mothers who cannot breastfeed or have trouble breastfeeding.  When you consider that only 49% of mothers can breastfeed at six months, the population at risk here is significant.  Children need the nourishment provided by breastfeeding or baby formula for up to one year, according to the Center for Disease Control.  Because of its high price, baby formula has become a hot item on the secondary market, where a high demand for the product exists.

In addition to increasing prices, baby formula is a part of the Women, Infants and Children (WIC) program.  This federally funded program provides support for parents with limited means by providing monthly issuances of food packages, along with other resources such as education and health care referrals.  As supportive and helpful as this program is for struggling parents, states also benefit by having the ability to regulate retailers and the shelf life of products through WIC.[1]

The need for regulating baby formula arose in the late 1990’s when it became clear that baby formula not only presented an economic threat to low-income parents, but it also presented a health threat to young children.  One of the largest theft-rings of the era involved the re-packaging of baby formula and the shipment of these counterfeit products to unsuspecting stores.  Drug addicts and people looking for quick cash worked in the theft-rings as low-level thieves by getting paid $1 per can of stolen baby formula.  Once stolen and turned into the ringleaders, the can would be re-packaged as a more expensive brand so that retailers paid a higher price for it.

This re-packaging scheme also caused the cover-up of unsafe ingredients and passed expiration dates because the cans could be resold on the secondary markets where expiration dates and ingredients are un-regulated.  Eventually, investigators uncovered the theft-ring after it had netted $44 million in a span of eighteen months.  Criminal theft-rings can sell baby formula to secondary stores for 30% of the retail price, which in itself explains why the product has become so attractive for theft-rings.

In addition to fraudulent re-packaging, baby formula also can be used to manufacture illegal drugs.  Manufacturers mix baby formula into certain drugs, such as heroin and cocaine, to cut their potency.  Formula can also be used to stretch the product when supplies are low.  However, baby formula demand among consumers remains higher than among drug dealers.

Even more concerning is that the large-scale criminal theft-ring does not even begin to include the thefts by young mothers who feel they have no other option but to steal formula to feed their child.  The product has become popular for both populations—struggling mothers and high-profile criminals.

Courtesy of the Associated Press.

Courtesy of the Associated Press.

States Crack Down

As mentioned previously, states are taking action to regulate baby formula.  Some states, such as Texas, have created legislation requiring retailers to buy from approved wholesalers.  Other states have amended criminal statutes to prevent baby formula from disappearing from retailers’ shelves.  For example, Michigan legislators wanted to make organized theft, which most often is behind baby formula theft, a felony.

The North Carolina legislature has recently passed a law making larceny of baby formula over $100 a Class H felony.[2]  Because North Carolina’s punishment for stolen goods is typically not a Class H felony unless the property is valued at $1,000, punishing $100 worth of stolen baby formula at this level is severe.[3]  North Carolina legislators also worked to write a bill that would fine retailers up to $2,000 for having adulterated or misbranded food for sale.

A Population is Affected

The theft-ring and resulting legislation severely impacts low-income families.  As the cans disappear from shelves, stores raise their prices.  If parents look for other means to get formula to feed their baby, they risk getting expired formula or formula mixed with unsafe ingredients.  The legislative intent behind the new laws clearly attempts to prevent all of this; however, it may only be causing more harm.

Many stores are taking measures into their own hands by attempting to safeguard inventory by putting baby formula behind a courtesy counter or using electronic tracking devices.  Joe LaRocca of the National Retail Foundation told ABC news: “Grocery chains will tell you that formula is targeted so often that in some cases they have locked it up, moved it behind the cash register, strategically put it on the floor, and in some cases, put only a limited supply on the shelves.”  This may be a key solution to the problem; however, price is still an issue and remains the driving force behind baby formula theft.  In addition, when stores place formula behind the counter, further safety measures may occur such as escorting a customer to the cashier.  This can make the consumer feel extremely uncomfortable—as if they are being accused of a crime.

In addition to WIC, community organizations provide support for struggling mothers.  Organizations like Loaves and Fishes in Charlotte provide formula to young mothers, as well as many church-sponsored food pantries.  As much as these organizations try to help mothers, they have a tough time keeping the product available once an order comes in.  In fact, Loaves and Fishes recently stated that a $9,000 baby formula order will only last one month in their seventeen Charlotte-area pantries.

Because of the crime associated with baby formula, and the high prices of the product, the needs of low-income mothers are often not met.  Community support is available, but it is limited.  While retailers and legislators are working to crack down on crime of this product, an entire generation of children are being adversely affected.

[1] WIC is a federal program designed to provide food to low-income mothers and babies under five years old.  The United States Department of Agriculture funds the program and each state administers it for their residents.  Thus, the state has capability to regulate through WIC by setting boundaries in how the program is administered.

[2] NCGS § 14-72.11.

[3] NCGS § 14-72.

Comments are closed.

%d bloggers like this: