'People lose either way': Lebanon's government ends infant formula subsidy

Baby milk subsidy is latest to go in economic crisis

The price of infant milk formula in Lebanon has risen dramatically after subsidies ended. iStockphoto

Lebanon has lifted the subsidy on infant formula, the latest casualty in a steady list of goods and services as public institutions continue to erode amid the country’s economic crisis.

Since the start of Lebanon’s financial woes over three years ago, the country has suffered bouts of shortages in baby formula and other subsidised goods and services including fuel, bread and medicine.

Owing to a lack of “clear solutions to end these shortages”, the Lebanese Health Ministry has decided to end subsidies on baby formula, caretaker health minister Firas Al Abiad said on Tuesday.

“We buy large quantities of subsidised milk that were arriving [in Lebanon] almost sufficient for two countries. And they disappear after a very short time,” Dr Al Abiad said.

State subsidies on baby formula had come under strain as the Central Bank struggles to secure payments for subsidised imports.

Subsidised goods are also routinely sold on the black market for a profit, or smuggled into neighbouring Syria, which suffers acute shortages owing to an economic collapse after more than a decade of war. Authorities have been unable to clamp down on black market trade and cross-border smuggling, which has become a routine aspect of daily life.

“The reason we took the decision to lift subsidies on infant formula is because we wanted to secure milk for children and not for the sake of merchants who take advantage of the milk subsidy to smuggle and sell it on the black market,” Dr Al Abiad said.

Ghassan Al Amin, a pharmacist and the former head of the country’s Pharmacist's Syndicate, agreed.

“Let’s say, for example, that 5,000 boxes of baby formula were imported to Lebanon,” he said. “The pharmacies would only receive 2,000 boxes.”

Last month, a subsidised 400 gram box of Similac infant formula was priced by the Health Ministry at 337,044 lira, the equivalent of $7.50 at the street market rate. After subsidies were lifted, the same box of formula now costs 775,326 lira, or $17.23.

A 400 gram box of Babelac for infants was 178,019 lira, or $4. It now costs about $7.40

Health practitioners fear that the drastic price rise will make baby formula inaccessible.

Lebanon’s prolonged economic crisis has driven more than 80 per cent of the population into poverty, according to UN estimates, and brought the local currency’s value down to a fraction of its original worth. Many in the country struggle to make ends meet.

“But to be honest,” said Dr Al Amin, the end of the baby formula subsidy “places us in the middle of two problems. If the baby formula is subsidised but it’s not in stock, it’s a problem. And if it’s in stock but it’s unaffordable because it’s not subsidised, it’s also a problem.

“People lose either way.”

Eva Moussa, a first-time mother of a six-month-old girl, told The National she was numb to the news that the baby formula subsidy had been lifted.

“It’s not like we could find baby formula anyway,” she said.