A baby formula supplier will donate more than $6,000 worth of formula to Brooklyn families after it reached a settlement with New York Attorney General Letitia James
An investigation by James’ office found that Paragon USA & Co. LLC took part in price gouging in the midst of the 2022 national baby formula shortage, illegally forcing families to pay “unreasonably high prices.” Paragon, which supplies formula to New York retailers, raised its prices by more than 20% in 2022 and raked in “tens of thousands of dollars in additional revenue,” the investigation found.
In addition to the formula donation, Paragon will pay a $10,000 penalty fee, according to the AG’s office, and donate $35,000 in formula or cash — including the $6,300 worth of formula it will donate to Brooklynites.
“Taking advantage of a crisis to squeeze extra profits from families who are struggling to feed their children is not only heartless, it’s illegal,” James said in a statement. “My office took action, and we are delivering free formula to families in need.”
The Office of the Attorney General will continue to pursue businesses that participate in price gouging during emergencies, James added.
Paragon did not respond to requests for comment.
Two organizing groups, Women’s Empowerment Coalition of New York City and Mixteca, will distribute the baby formula donations across the borough.
“We extend our deepest gratitude to the New York State Office of the Attorney General for their generous donation of baby formula, a vital resource for many families struggling to afford it,” said Somia Elrowmeim, CEO and Founder of the Women’s Empowerment Coalition of New York City, in a statement.
The Women’s Empowerment Coalition of New York City supports and uplifts southern Brooklyn women from immigrant and marginalized backgrounds.
“We are grateful for this vital donation of baby formula at a time when many families are still feeling the pressures of inflation,” said Lorena Kourousias, the Executive Director of Mixteca, a group that supports Mexican and Latin-American immigrants.
“This donation will directly support immigrant families in Brooklyn who continue to face economic hardship and barriers to essential resources,” added Kourousias.
The impacts of the formula shortage ripple through the country, particularly affecting families already struggling financially.
A 2024 study published by the American Academy of Pediatrics concluded that during the 2022 formula shortage, national breastfeeding rates “increased significantly.”
This increase was documented most dramatically in women who used food assistance programs, had lower education levels, were women of color, used Medicaid insurance, and lived in less populated areas, according to the Breastfeeding Trends Following the U.S. Infant Formula Shortage report.
Earlier this month, the OAG settled another lawsuit regarding price gouging during the 2022 baby formula shortage. Walgreens has agreed to donate over 9,500 cans of baby formula to be distributed throughout New York. The donation is equivalent to the wholesale price of $200,000. Walgreens will be required to pay a $50,000 penalty fee.
