County Outlaws Price Gouging on Infant Formula
SAN JOSE – In response to the supply chain shortage for infant formula, the Santa Clara County Board of Supervisors recently adopted an Urgency Ordinance to protect families from predatory price gouging.
“It can be really tough to buy formula these days, and some young children require formula to survive,” said County Supervisor Joe Simitian. “I know we can’t control supply chain issues, but we can send a clear message to price gougers – who are buying up formula to resell it at a higher price – that price gouging won’t be allowed.”
The Urgency Ordinance extends the enforceability of the County’s price gouging restrictions (a criminal offense punishable by a fine of up to $5,000 and/or imprisonment for up to six months), as well as other important emergency-related prohibitions, throughout the duration of a proclaimed emergency. Prior to the Board’s decision on June 7, 2022, there was no enforcement tool to pursue and punish price gouging on infant formula in Santa Clara County.
“Exacerbating the nationwide supply problem, reports indicate that bad actors are engaging in widespread practices to buy up and then resell infant formula at a steep markup,” said James R. Williams, County Counsel for Santa Clara County. “This bulk purchasing and hoarding of supplies contributes to shortages. Reselling those scarce supplies at predatory prices also exacerbates inequalities in our community, because some families simply can’t afford to buy formula at an inflated price even if they have an infant who desperately needs it.”
In February 2020, the County proclaimed a local emergency and declared a local health emergency to respond to the COVID-l9 pandemic. Under the Civil Protection and Emergency Management Ordinance, price gouging of consumer products during a proclaimed emergency was prohibited, but that prohibition lasted for only 180 days after the County proclaimed the COVID-19-related local emergency. The new Urgency Ordinance will be in effect until thirty days after the emergency has concluded.