New York Attorney General Letitia James announced Monday that her office has secured more than $13,500 worth of baby formula from Paragon USA & Co., LLC (Paragon) for families in Rochester. This donation follows an investigation into Paragon for price gouging during the national baby formula shortage of 2022. As part of a settlement with the Office of the Attorney General (OAG), Paragon paid a $10,000 penalty and must provide an additional $35,000 in donated baby formula or cash.
The donated formula will be distributed to families in need throughout Rochester by Foodlink, a local community organization serving the Greater Rochester and Finger Lakes regions.
“During the nationwide baby formula shortage, Paragon took advantage of New York families by unlawfully raising prices to increase profits,” said Attorney General James. “My office ensured Paragon was held accountable for its illegal actions and made sure that New York families received relief. I thank Foodlink and its partners for helping distribute this formula to those in need.”
Julia Tedesco, President and CEO of Foodlink, expressed gratitude for the donation, highlighting the ongoing demand for baby products amidst high grocery prices. “This generous contribution will greatly benefit our members and clients who urgently need formula,” Tedesco said.
In 2022, Abbott Laboratories, a major baby formula manufacturer, closed a plant and recalled its formula, which worsened the shortage as prices surged. Abbott produces more than 40 percent of U.S. infant formula, and the plant closure disrupted a significant portion of national supply.
New York’s price gouging laws prohibit vendors from unfairly increasing prices on essential goods during market disruptions. In May 2022, Attorney General James warned over 30 retailers statewide to stop overcharging for baby formula after reports of high prices from consumers.
The OAG’s investigation found that Paragon raised formula prices by over 20 percent after Abbott’s recall, generating tens of thousands of dollars in extra revenue. As part of the settlement, Paragon is required to pay $45,000 in penalties and donations, with $35,000 to be donated in formula or cash by June 10, 2025.
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