WIC and the Retail Price of Infant Formula

by Victor Oliveira, Mark Prell, David Smallwood, and Elizabeth Frazão

Rebates from infant formula manufacturers to State agencies that administer the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) support over one-quarter of all WIC participants. However, concerns have been raised that WIC and its infant formula rebate program may significantly affect the infant formula prices faced by non-WIC consumers. This report presents findings from the most comprehensive national study of infant formula prices at the retail level. For a given set of wholesale prices, WIC and its infant formula rebate program resulted in modest increases in the supermarket price of infant formula, especially in States with a high percentage of WIC formula-fed infants. However, lower priced infant formulas are available to non-WIC consumers in most areas of the country, and the number of these lower priced alternatives is increasing over time.

Keywords: WIC program, cost-containment, food-item restrictions, vendor restrictions, manufacturers rebates, food package costs, Special Supplemental Nutrition Program for Women, Infants, and Children, child nutrition, FANRP, food assistance

In this publication...

• Entire Report
• Report summary
• Abstract, Acknowledgments, Contents, Summary, Definitions
• Introduction
• Overview of the WIC Program
• The WIC Infant Formula Rebate Program
• The Domestic Infant Formula Market
• Source of Infant Formula Data
• Infant Formula Trends
• Infant Formula Prices and Availability by Market Area
• Event Study Analysis of Retail Infant Formula Prices
• Multivariate Analysis of the Determinants of Retail Infant Formula Prices
• Discussion
• Conclusions
• References
• Appendix A
• Appendix B
• Appendix C
• Appendix D
• Appendix E