by Marion Nestle
Aug 20 2011

How WIC enriches infant formula companies

The USDA has just analyzed the effect of WIC (the Special Supplemental Program for Women, Infants, and Children) purchases of infant formulas on the companies that produce them. 

WIC provides coupons or vouchers for infant formula for women who are not breastfeeding.  Many people believe that WIC support of infant formulas discourages breastfeeding, but that’s not what this post is about.

WIC buys about half (57 to 68%) of all of the infant formula sold in the United States.   WIC is not an entitlement program.  It only has so much money; once that money is spent, the program has to turn away eligible clients.

The USDA delegates WIC management to states.  As the USDA report explains

To reduce cost to the WIC program, each State awards a sole-source contract to a formula manufacturer to provide its product to WIC participants in the State. As part of the contract, the WIC State agency receives rebates from the manufacturers.

Translation: States grant WIC contracts to the manufacturer who sells infant formula to it at the lowest price.  The winning prices may be as low as 10% of retail cost.

Why would companies want to do this?

In this study, we use 2004-09 Nielsen scanner-based retail sales data from over 7,000 stores in 30 States to examine the effect of winning a WIC sole-source contract on infant formula manufacturers’ market share in supermarkets.

We find that the manufacturer holding the WIC contract brand accounted for the vast majority—84 percent—of all formula sold by the top three manufacturers.

The impact of a switch in the manufacturer that holds the WIC contract was considerable. The market share of the manufacturer of the new WIC contract brand increased by an average 74 percentage points after winning the contract.

Most of this increase was a direct effect of WIC recipients switching to the new WIC contract brand. However, manufacturers also realized a spillover effect from winning the WIC contract whereby sales of formula purchased outside of the program also increased.

Mind-boggling, no?

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  • Kat

    Wow “Jennifer”, you are on quite the mission, aren’t you? WIC has been studied at great length — it is one of the most successful and economically efficient public health programs to date.

    While I agree that the infant formula issue is a concern which can be debated at length, isn’t it most important that infants receive SOME nutrition, regardless if it’s from the breast or not? You cannot force women to breastfeed who do not want to; or have no support in their life to maintain breastfeeding; or have a work situation which will support the time required to pump multiple times a day to maintain breastmilk supply; or lack adequate nutrition themselves to produce sufficient breastmilk; or who come from families or a cultural background that does not support breastfeeding; or who have addictions or take prescription medications that preclude breastfeeding for the safety of the infant.

    Just in case some readers are mistakenly convinced by Jennifer’s persistent argument that “WIC should be abolished”, please consider the facts first, which go far beyond the debate over formula vs. breastfeeding:

    (This is just a small sample of the articles available free full-text for all readers if you just search PubMed for “WIC Cost Benefit”)

    http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1382070/
    “Using these data to estimate costs, prenatal WIC enrollment is estimated to have reduced first year medical costs for U.S. infants by $1.19 billion in 1992.”

    http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1403715/?tool=pubmed
    “Newborn and post-partum costs starting within 60 days after the birth were $347 lower for the adequate prenatal care pregnancies, resulting in a savings of $1.49 for each extra $1 spent on prenatal care.”

    http://www.ncbi.nlm.nih.gov/pubmed/8623856
    “Nutritional and nonnutritional benefits to participation in the Women, Infants and Children Food Supplement Program were confirmed. Women enrolled in the program were less likely to deliver a low-birth-weight infant.”

    http://pediatrics.aappublications.org/content/114/1/169.long
    “Infants < or =12 months of age benefit from WIC participation."

    http://ajph.aphapublications.org/cgi/content/full/92/3/399?view=long&pmid=11867319
    "Collocation of WIC clinics at MCO sites can improve health care of low-income infants".

  • http://www.responsibletechnology.org Samm Simspon

    You forgot to mention that the millions of babies on WIC get their first taste of genetically modified corn and soy and most likely bovine growth homrone from the cow milk through these infant formulas. It’s more than a crime, considering that genetically modified ingredients aren’t labeled in the U.S., have never been tested on humans and we are told they are “substantially equivalent” to other “untampered” food. This means that babies are eating bacteria resistant to Round Up, ecoli, an antibiotic market gene and the califlower mosaic virus just in their first days of life. Recent research on rats, show liver problems, mortality and sterility. Tragic. Who is going to stand up for those who can’t make the choice for organic and Non- GMO?

  • anonymous joe

    ‘WIC’ IS NOT AN ENTITLEMENT PROGRAM???!!!

    That is BS.

    Before I was determined eligible for Social Security Disability, I had to have WORKED for a living and then I had to have an ADMINISTRATIVE HEARING to verify my injuries and every job I had ever worked before I could be considered for enrollment.

    You know why?

    BECAUSE I HAD WORKED ALMOST EVERY DAY AND OVERTIME OF THOSE 45 YEARS AND MONEY WAS TAKEN OUT OF EACH ONE OF MY PAYCHECKS THROUGH FICA AND IT WAS PAID INTO SOCIAL SECURITY OTHERWISE I WOULD HAVE GOTTEN NOTHING when I applied!

    I EARNED THE RIGHT TO RECEIVE SOCIAL SECURITY!

    I AM NOT ENTITLED TO IT.

    I EARNED IT.

    I PAID INTO IT FROM MY JOBS THAT I WORKED AND I WORKED LOW PAYING JOBS FROM HELL SO I COULD HAVE SOMETHING WHEN I GOT OLD OR IF I WAS DISABLED. THERE WERE NO BENEFITS, SICK DAYS, INSURANCE…

    I EVEN WENT TO WORK SICK BECAUSE IF I DIDN’T WORK, I WOULDN’T EAT OR HAVE A PLACE TO LIVE. I ALSO PAID TAXES. A LOT OF TAXES.

    To get WIC, all a woman has to do is be pregnant and have a benefits savvy caseworker who can enroll her.

    Did the woman work for that WIC benefit? She created a baby and that is about it.. She will go into “labor” having more babies AND WELFARE SUBSIDIZED KIDS ARE IN ALL ETHNIC GROUPS & COLORS.

    A WOMAN DOES NOTHING TO EARN WIC EXCEPT BE LOW INCOME AND PREGNANT AND/OR HAVE TODDLERS TO FEED.

    IT IS AN UNEARNED ENTITLEMENT.

    I DON’T WANT THE KIDS TO STARVE BUT I THINK CONTRACEPTION SHOULD BE A PREREQUISITE FOR WIC OR ANOTHER ENTITLEMENT PROGRAM BASED ON FECUNDITY WITHOUT MARRIAGE!

    A pregnant woman here can get free medical & dental care,free housing,free job training,free transportation (bus pass),WIC/FREE FOOD, free utilities, free legal advice…free child care and sleep with as many men as she can and have more babies when that gravy train runs low on the dough…

    WE HAVE PEOPLE ROBBING BANKS & COMMITTING CRIMES JUST SO THEY WILL HAVE FOOD & A PLACE TO STAY.

  • http://wicwoes.com lynn woes

    Love seeing people talking about the politics behind WIC. I definitely believe that the formula companies benefit from WIC and even run WIC. Juicy Juice is known as WIC juice among low income moms- guess who makes Juicy Juice- Nestle! Big surprise huh? WIC is a program run by formula companies and the Dairy farmers. They have their lobbyist hard at work to make the program run exactly the way that gets them the most money. Yes they sell their formula to WIC at incredibly low prices but then they just make that money back up by raising the price of it for non-WIC participants. If any of you would like to be guest bloggers on WICwoes and share your opinions or knowledge about how WIC works behind the scenes we would LOVE to have you guest blog for us!

  • lili

    @ joe, i believe you are mistaken these people get the same things and benefits you get , however these women might have not had the opportunities you did to earn money, they might not have had any education, I dont know if you know what conditioning means but let me explain..maybe that woman’s parents did not have enough money to send her to school to learn about the many types of contraception, or maybe she was neglected and the only way to feel that she would get her parents attention was to get pregnant, I believe everyone has busted their but off to be where they are and as I already told you maybe her family, friends and environment where she lived conditioned her to this, and I believe that indeed many take advantage of this program but at the same time there’s a lot of people that do need it.

  • Michelle

    Joe,
    I receive WIC benefits. I also worked my entire life and usually made low wages. Not every job offered sick, vacation or insurance. I had to stop working when I became pregnant because of health issues that prevented me from maintaining my job. I don’t expect you to suddenly change your position, but just understand that some of us who are ‘entitled’ to WIC benefits are not sleeping around and popping out litters of babies to get more beans, cheese and evaporated milk. I am not a single parent and my husband works very hard but it isn’t enough to cover everything. I don’t know where you live, but you say that “A pregnant woman here can get free medical & dental care,free housing,free job training,free transportation (bus pass),WIC/FREE FOOD, free utilities, free legal advice…free child care and sleep with as many men as she can and have more babies when that gravy train runs low on the dough…” I get 4 cans of beans, 1 can of evaporated milk, 16 oz of cheese, 1 loaf of bread and 2 gallons of milk each month. It helps me but sure isn’t free medical care, free dental care, free housing,free job training,free transportation (bus pass),free utilities, free legal advice, or free child care . I do not sleep around and those that do, probably did so before signing up for WIC.
    I worked enough so that one day, I too, can collect Social Security. For now, I collect WIC and you can’t make me feel ashamed.

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  • Blade Frank

    Let mothers make their own health choices for their children, instead of forcing them to buy a horrible brand all in the name of profit.