Financial documents and whistleblower testimony spotlighted by The Guardian on Friday show that the U.S.-based baby formula producer Abbott used the massive windfall profits it accumulated between 2019 and 2021 to enrich shareholders, even amid a deadly bacteria outbreak that has triggered nationwide outrage and contributed to a formula shortage.
"Abbott detected bacteria eight times as its net profits soared by 94% between 2019 and 2021," The Guardian's Tom Perkins reported. "And just as its tainted formula allegedly began sickening a number of babies, with two deaths reported, the company increased dividends to shareholders by over 25% while announcing a stock buyback program worth $5 billion."
Rakeen Mabud, chief economist at the Groundwork Collaborative, told the newspaper that "Abbott chose to prioritize shareholders by issuing billions of dollars in stock buybacks instead of making productive investments."
"It's important that we have high standards for something as vital as baby formula," Mabud added.
In late February, Abbott recalled a lot of its Similac PM 60/40 powdered formula that was manufactured at a plant in Sturgis, Michigan after an infant who consumed the product died of a cronobacter infection. According to the Centers for Disease Control and Prevention, at least four infants fell ill after consuming Abbott formula produced at the Sturgis facility, which has since been temporarily shuttered.
Abbott, which has faced a Justice Department complaint and...
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