US watchdog probes baby-formula producers for collusion
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The US Federal Trade Commission (FTC) is investigating whether baby-formula companies colluded on bids for profitable state contracts.
FTC commissioner Alvaro Bedoya said the regulator is looking at the possibility companies “engaged in collusion or coordination with any other market participant regarding the bidding”.
The baby-formula makers, including Abbott Laboratories and Nestlé, are accused of conspiracy on bids for the US Department of Agriculture’s Women, Infants and Children (WIC) programme that supports low-income families by providing them with free formula.
The FTC is also investigating if the alleged collusion had impacted the market more broadly as the revenue coming from the contracts would likely have raised the concerned companies' sales.
Optimism on food commodities as FAO index sinks to two-year low
Global food commodity prices have resumed an easing trend as an index compiled by the United Nations sank to its lowest level in more than two years.
“Significant drops” in the price of cereals, vegetable oils and dairy products led a 2.6% month-on-month decline in May, the Food and Agriculture Organization of the United Nations reported today. However, the cost of meat, sugar and rice rose during the month.
The FAO Food Price Index unexpectedly halted a 12-month run of declines in April – rising 0.6% – as the renewal of the so-called Black Sea Grain Initiative hung in the balance. Russia finally agreed to a 60-day extension on 17 May, shorter than the 120-day period requested by Ukraine.
Nevertheless, on a rolling 12-month basis, the gauge dropped 19.7% in April and those declines continued in May. The index of five food commodities fell 21.4% to average 124.3, the lowest level since April 2021. It has now retreated 22.1% from an all-time high reached in March 2022.
French food companies agree to re-negotiate with retailers on pricing
Pressure from the French government for the country’s food manufacturers to lower prices has led to companies agreeing to earlier-than-planned negotiations with retailers.
The announcement by Finance Minister Bruno Le Maire came after he met with food industry representatives and days after he threatened to either use tax measures to recover what he considered to be excessive profits, or name and shame companies if they did not accept talks with grocers.
Food companies and retailers agreed to an average 10% increase in annual price negotiations in March but with French food inflation reaching 15% in recent months the government stepped in. It called on the 75 companies that make 80% of French food to renegotiate terms if selling prices have risen more than the 10% agreed and if at least one of their input costs had fallen more than 20% since 1 March.
Small- and medium-sized companies (SMEs) are not covered by the agreement.
Tyson Foods “looking at everything” to improve performance
Tyson Foods is weighing up the future of assets across its business to sharpen operations and boost results.
The Jimmy Dean brand owner has come under investor scrutiny in recent weeks amid pressure on sales and a cut to its guidance.
In May, Tyson reported a second-quarter loss amid pressure on margins and flat sales. The company acknowledged the results were “weaker than expected” and cut its forecast for annual sales.
“We’re looking at everything in this environment and in an effort to be the best version of Tyson we can be,” CEO Donnie King said. “I think the environment will require everyone to be more efficient.”
Nestlé to shut two Health Science plants in US
Nestlé has revealed it is set to close two Health Science facilities in the US.
In a statutory employment notice, Nestlé Health Science, the Swiss giant’s division that focuses on healthy and medical nutrition, stated it “is in the process of consolidating its supply chain network to increase efficiency.”
Chris Richardson, Nestlé Health Science director of project management and HR special projects, stated in the WARN notice that “312 positions will be eliminated on a permanent basis” at the two plants, which are just west of Pittsburgh, in Robinson and Findlay townships.
“There are no bumping rights at the impacted facility. The employees have no elected collective bargaining representative,” he added. The jobs are set to be cut from the end of June.