Your Money : FDA Says Phony Similac in Southland May Be Linked to Bigger Scam
The U.S. Food & Drug Administration said counterfeit-labeled cans of Similac, a milk-based baby formula, have been found in Southern California and that it appears to be linked to a scheme to distribute phonily packaged formula in other states.
The Southern California probe is the latest FDA disclosure in a nationwide investigation of infant formula counterfeiting. FDA agents describe the operations as an illegal spinoff of a legal underground trade that has come to dominate the infant formula distribution network.
Earlier this month, the agency said it had discovered that genuine but outdated Similac in cans with counterfeit Similac labels was being sold in 15 states, but it had not specified what communities. The agency now says some of it was purchased at a Lucky supermarket in Long Beach.
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Some of the cans sold in Long Beach and labeled Similac instead contained Isomil, a soy-based formula. That did not present a health threat, the FDA said, but the reverse--the sale of milk formula portrayed as soy-based--would be cause for concern because of the potential for allergic reaction to milk-based formula.
FDA officials said it is not yet known if the Long Beach case is related to the distribution of fake Similac in Sacramento and the San Francisco Bay area that sickened more than 50 infants in February. A Mission Viejo man has been charged in that case. The mislabeled cans from Long Beach are coded with the same fictitious expiration date and lot number--OCT96 L5 SI 89635--as the counterfeit-labeled formula found in 14 other states, the FDA said.
Lucky Stores found and removed more than 17,000 cans of Similac bearing that fictitious code from stores and warehouse facilities in Southern California after a consumer reported the discovery of three mislabeled cans of Isomil on March 12. Lucky said it acquired the Similac from a regular supplier.
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“It appeared to be a perfectly legitimate product and there was no reason to suspect otherwise until we were notified of the problem,” Lucky spokeswoman Judy Decker said.
FDA investigators said some of the counterfeit labeling stems from a widespread underground trade in genuine brand-name formula--a legal practice dominated by “diverters” who buy bargain-priced formula from retailers that sell it as a “loss leader” to attract customers. These diverters then resell it at a profit to other stores or to formula distributors. The counterfeit labels become necessary when the formula passes its expiration date or when uniform codes and expiration dates are needed to satisfy retailers buying it in bulk.
Some agents believe that some counterfeiters are printing labels with fake codes to replace labels on cans of outdated formula. Outdated formula tends to lose its nutritional value, but is not a health hazard, said a spokeswoman for Abbott Laboratories, the maker of Similac and Isomil.
