Gates investment in start-up not linked to formula shortage

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A fund backed by Bill Gates has invested in a startup working to develop lab-made breast milk, but it won’t hit the market for several years. Yet social media posts make baseless claims that Gates is behind the current formula shortage — which stems from supply chain issues and the closure of a major manufacturing plant.

Breakthrough Energy Companiesa Bill Gates-backed fund that invests in climate-friendly technologies, led in 2020 to a $3.5 million round financing for BIOMILQ, a startup working on reproducing human breast milk using breast cells.

The company’s product has not yet been released – June 2021 blog post noted that “we are only in the first quarter”.

But the two-year investment is cited in social media posts for the baseless claim that Gates engineered the current formula shortage because he is invested in a competing product.

The shortage is actually due to supply chain constraints exacerbated by the recall of a major manufacturer and the closure of the plant, as we reported, and there is no evidence that Gates or Breakthrough Energy Ventures are connected to it.

Breakthrough “has invested in BIOMILQ as a low-carbon alternative to dairy farming,” a company spokesperson told FactCheck.org in an email. The claim that the fund is causing the formula shortage “is false,” she said.

NC, in a report earlier this month said BIOMILQ is at least three years away from commercial availability.

Gates is chairman of Breakthrough Energy Ventures, which counts high-profile investors Jeff Bezos, Richard Branson and Michael Bloomberg among its board members. The fund is part of Breakthrough Energy, which finances technologies with the aim of achieving net zero emissions by 2050.

A frequent target conspiracy theories, Gates is again falsely blamed for a national crisis.

A Tweeter said Gates “has invested heavily in synthetic soy breast milk.” The tweet, from an account called LivePDDave, then asks two main questions: “It wouldn’t have anything to do with the formula shortage, would it? Create a problem (like Covid) and then step in with a ‘solution’?” The second question could be a reference to a number of false claims about Gates, including the debunked claim that he conspired to create the pandemic in order to to depopulate the world with vaccines.

Demand for baby formula is also making the rounds on Facebook, with a position falsely claiming that Gates has already opened a “synthetic breast milk factory”.

Another widely shared position wrongly asks the Hourly of events. “Pfizer says don’t breastfeed. Formula is in short supply. Bill Gates promotes new artificial breastmilk technology. All in 2 weeks.”

Conservative commentator Candace Owens repeated the request. “Doesn’t Bill Gates have the best chance? she tweeted. “Just like with the COVID vaccine – he makes an investment, then suddenly there is a pandemic or a shortage and everyone has to line up for their product. Of course, he invested in laboratory breast milk! »

But as we have written, the shortage of infant formula in the United States is largely due to a product recall and the subsequent plant closure by Abbott Nutrition, a major infant formula maker, and ongoing supply chain issues exacerbated by the COVID-19 pandemic, experts say.

Abbott plant cleared to restart

Abbott said May 16 had reached a agreement with the Food and Drug Administration take steps to resume production, and formula shipments could resume six to eight weeks later. House Democrats, meanwhile, presented legislation this would provide $28 million to help the FDA increase its workforce and avoid future shortages.

Abbott in a May 13 blog post recognized its role in the shortage of infant formula. “We know the recall has exacerbated the industry-wide shortage of infant formula, and we are working to get as many products as possible into the hands of parents,” the company said. Abbott said it has shipped “millions of cans” from a facility in Ireland as it works to address FDA concerns and restart operations at the Michigan plant.

The nationwide stock-out percentage for infant formula was 43% in the week ended May 8, up 2% to 8% in the first half of 2021, according to pricing provider Datasembly. At the end of April, the figure was 40%.

‘Perfect Storm’ created a crisis

The shortage is the result of a “perfect storm of multiple factors”, said Jason Miller, associate professor of logistics at the Eli Broad College of Business at Michigan State University.

Only a handful of factories in the United States make infant formula, with four companies accounting for about 45% of industry shipments, Miller told us in a phone interview, citing government data. This means that “any major plant closure causes problems”.

Also, “these factories turn inventory very quickly,” so there’s not a lot of stock available in case something happens, Miller said. Once people realized there was a shortage of infant formula, there was likely “hoarding,” similar to the toilet paper situation at the start of the pandemic, he said. “All of a sudden you have a recipe for shortfalls as we see it,” he said.

The shortage is expected to last for some time even after the Abbott plant reopens, Miller said. “Americans need to understand that this is not a product that you just throw in a vat and magically produce it in two hours,” he said. “Many quality checks are carried out repeatedly.”

Editor’s Note: FactCheck.org is one of many organizations work with facebook to debunk misinformation shared on social media. Our previous stories can be found here. Facebook has no control on our editorial content.

Sources

Roy, Aditi. “Altbreastmilk Biomilq raises $3.5m from Bill Gates’ investment firm.” CNBC. June 16, 2020.

Breakthrough Energy Ventures Press Office. Send to FactCheck.orgMay 17, 2022.

Chan, Milly. “Lab-grown ‘human milk’ could be three years away.” CNN. May 3, 2022.

Filera, Angelo. “Video targets doors with old clip, misleading edit.” FactCheck.org. March 5, 2021.

Filera, Angelo. “The novel coronavirus was not ‘predicted’ in the simulation.” FactCheck.org. January 29, 2020.

Data assembly. Press release. “The nationwide stockout is now at 43% for the week ending May 8.” May 10, 2022.

Abbott Laboratories. Press release. “Abbott enters into a consent decree with the U.S. Food and Drug Administration for its Sturgis, Michigan plant; Agreement paves way for facilities to reopen.” May 17, 2022.

House Appropriations Committee. Legislation. “To create emergency supplemental appropriations to address the shortage of infant formula in the United States for the fiscal year ending September 30, 2022 and for other purposes.” May 17, 2022.

Abbott Laboratories. Newsroom: Nutrition, Health and Wellness. “Abbott Provides Infant Formula Update.” May 13, 2022.

Fact check by Reuters. “Fact Check-Bill Gates Investment in Lab-Produced Breast Milk Company Not Linked to Formula Shortage, Contrary to Online Posts.” May 13, 2022.

Miller, Jason. Associate Professor of Logistics, Department of Supply Chain Management, Michigan State University Eli Broad College of Business. Phone interview with FactCheck.org. May 17, 2022.

Whyte, Liz Essley. “FDA relaxes infant formula import rules to boost supplies.“The Wall Street Journal. May 16, 2022.

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