Gerber, the popular maker of baby foods founded here in Michigan in 1928, is suing the New York Department of Health. According to the suit, the DOH removed Gerber from its Women, Infants and Children supplemental nutrition program, which it had been part of since 2009, without providing a reason.
WIC is a government program that provides food assistance to poor women and their children. It provides vouchers to purchase products from an approved list. While the program is under the umbrella of the U.S. Department of Agriculture, states determine which products are included on its list.
According to the suit, the company was notified late last year by New York's DOH that its products would not be included on this year's approved list, called the Acceptable Foods Card. However, the suit contends that the notice did not indicate any issue with the company or its products. Further, it contends that "at no time from 2009 through 2013 did DOH ever express any concerns with Gerber baby food products with regard to quality, price or any other matter."
According to Gerber, which is seeking reinstatement in the program, the cost of the removal is almost $5 million. That number is based on totals of over $5 million in sales through the program for each the past two years. WIC is the third largest government food assistance program in the country, according to the suit, after food stamps and lunch programs in schools.
Gerber is the leading seller of baby food here in the U.S. Next is Beech-Nut, which is now the only baby food producer in New York's WIC program. Beech-Nut has a new factory near Amsterdam, New York. Reportedly $100 million of the $124 million it cost to build the state-of-the-art facility came from local and state economic incentive funds.
Gerber's suit does not mention these incentives or say that the Michigan-based company was removed from the New York program based on home-state economic considerations. However, it does say the decision was made "without lawful authority."
Michigan companies often don't know when and where their next legal battle is going to arise. That's why it is essential to have a strong legal team experienced in business litigation that can handle challenges nationwide and sometimes worldwide to help protect the financial interests of the business.
Source: Courthouse News Service, "Big Baby Food Fight in New York" Marlene Kennedy, Apr. 03, 2014