In fact, a lot of somewhat shady spice packets you get at asian groceries in the bay area have a crummy paper sticker with english labeling over the Indian/Chinese/... original label.
If this can happen for spices, why not for baby formula ?
I think that this is a case of noone wanting to take the risk of eventually someone selling some product that is expired or otherwise bad with relaxed labeling/... rules. I can understand it, too, from a biz POV.
I think the government needs to provide some sort of indemnification to importers/distributors/groceries. If the tradeoff demands it – 'X babies die/get sick because of malnutrition b/c missing baby formula' vs 'Y kids die/get sick because of bad baby formula.'
X/Y are just hard to pin down.