Effects of United States WIC infant formula contracts on brand sales of infant formula and toddler milks

J Public Health Policy. 2020 Sep;41(3):303-320. doi: 10.1057/s41271-020-00228-z.

Abstract

The United States (US) Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) provides free infant formula to low-income families with infants. State WIC agencies periodically solicit bids from manufacturers for the exclusive contract to provide infant formula in exchange for considerable rebates. Using Nielsen 2006-2015 retail scanner data, we estimated a difference-in-difference model to examine how winning a WIC infant formula contract affects sales of the new (winning) and former brands, including effects on sales of products not eligible for WIC (spillover). One year following a contract change, volume sales of WIC infant formula increased 322% (p < 0.01) for the new brand and decreased 77% (p < 0.01) for the former brand. Spillover effects included a 43% increase in sales of toddler milks for the new brand 2 years after the contract change. State WIC contracts allow manufacturers to market formula directly to consumers and may reduce breastfeeding policy effectiveness.

Keywords: Difference-in-differences; Infant formula; Spillover effect; Toddler milks; United States (U.S.); WIC.

MeSH terms

  • Breast Feeding / statistics & numerical data
  • Child, Preschool
  • Contracts / statistics & numerical data*
  • Food Assistance / statistics & numerical data*
  • Humans
  • Infant
  • Infant Formula / economics*
  • Infant Formula / statistics & numerical data*
  • Infant, Newborn
  • Models, Economic
  • Policy
  • United States