Newsom executive order bans price gouging of baby formula amid shortage
SACRAMENTO – Gov. Gavin Newsom signed an executive order banning excess price hikes on baby formula through the end of August, as an ongoing shortage impacts families across California and the nation.
Under the order, which took effect on Tuesday, retailers are generally not allowed to sell formula at a price that is more than 10% greater than the price charged by the seller as of February 17.
According to Attorney General Rob Bonta's office, violators may be subject to prosecution that can result of fines of up to $1,000 and / or up to six months in prison. Violators may also be subject to civil penalties of up to $2,500 per violation.
"With some California families wondering how they are going to feed their babies, the last thing they should have to worry about is bad actors looking to make a quick buck by hiking up the price of formula," Bonta said in a statement.
The order has some exceptions, such as if a retailer can prove if a price hike is "directly attributable" to additional costs imposed by the supplier.
Supplies of formula have been tight in recent weeks, due to supply chain woes and the recent massive recall of Abbott baby formula, which led to the closure of the company's factory due to unsanitary conditions. The factory, which is the nation's largest manufacturer of formula, has since reopened and is expected to release new formula to consumers later this month.
During the shortage, the federal government has airlifted formula from abroad.
Newsom's executive order is expected to remain in effect through at least August 31.
Bonta urges consumers who suspect price gouging to file a complaint with the Attorney General's office at https://oag.ca.gov/report or to contact local law enforcement.