Paragon USA Accused of Price Gouging Baby Formula During Crisis

New York Attorney General Letitia James has delivered a $6,300 donation of baby formula to families in Brooklyn, courtesy of Paragon USA & Co. LLC (Paragon). This act of charity follows an investigation by the Office of the Attorney General (OAG) into Paragon for price gouging during the 2022 national baby formula shortage.

The donation is part of a $45,000 penalty imposed on Paragon after they were caught raising prices more than 20 percent during the crisis. The company must also donate an additional $35,000 worth of baby formula or cash as part of their settlement with the OAG.

Attorney General James emphasized the need to protect families from exploitation during emergencies: “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. My office took action, and we are delivering free formula to families in need. I will continue to go after any business that price gouges during an emergency.”

The Women’s Empowerment Coalition of New York City and Mixteca, community organizations serving Muslim and Latino communities, will distribute the donated formula to those in need across Brooklyn. “Empowering survivors of domestic violence and supporting low-income families is not just an act of charity—it is a fundamental step toward building a just and compassionate society,” said Somia Elrowmeim, CEO and Founder of the Women’s Empowerment Coalition of New York City.

“We are grateful for this vital donation of baby formula at a time when many families are still feeling the pressures of inflation,” added Lorena Kourousias, Mixteca’s Executive Director. “This donation will directly support immigrant families in Brooklyn who continue to face economic hardship and barriers to essential resources.

In 2022, Abbott Laboratories closed one of its baby formula manufacturing plants and recalled formula produced there, leading to significant hardship for families across the nation. New York’s price gouging laws prohibit vendors from unconscionably increasing prices on goods vital to consumers during market disruptions. In May 2022, Attorney General James issued warnings to more than 30 retailers across the state to stop overcharging for baby formula.