David Smallwood

United States. Department of Agriculture. Economic Research Service

Victor J. Oliveira

Elizabeth Frazão

The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) is the major purchaser of infant formula in the United States. 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. 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.

The Infant Formula Market: Consequences of a Change in the WIC Contract Brand

Recent Trends in Rebates and Wholesale Prices

Rising Infant Formula Costs to the WIC Program

WIC and the Nutrient Intake of Children

WIC and the Retail Price of Infant Formula

Daniel L. Milkove

Elizabeth S. Morrissey

James D. Schaub

Judith Z. Kalbacher

Kenneth Lee Deavers

Richard J. Reeder

Robert A. Hoppe

Mary Ahearn

A Case Study

Distribution of Employment Growth in 10 Georgia Counties

Victor J. Oliveira

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