Abbott agrees to settlement over closure of largest baby formula plant in the US

Abbott Laboratories, a major baby formula manufacturer, agreed to pay $385 million to settle civil False Claims Act cases with the U.S. Justice Department and several states over bacterial contamination at its largest plant in Sturgis, Michigan. The settlement resolves claims that powdered infant formula made at this facility was contaminated with Cronobacter bacteria during manufacturing, posing a risk to public health. This case followed a 2022 recall of Abbott's products after four infants fell ill from consuming the formula manufactured there. The Justice Department initially sought felony charges but later opted for a civil resolution under pressure from senior leadership. Despite this settlement, Abbott maintains it did not admit liability or fault and emphasizes no unopened distributed product tested positive for bacteria. The plant closure exacerbated existing supply shortages caused by disruptions during the COVID-19 pandemic.