China fines baby formula firms $108 million for price-fixing

Written By Unknown on Rabu, 07 Agustus 2013 | 17.34

BEIJING: China has fined six mostly foreign baby formula companies a total of $108 million for price-fixing, the official Xinhua news agency reported on Wednesday.

The firms fined were Mead Johnson and Abbott from the US, Dumex, a subsidiary of France's Danone, Friesland of the Netherlands, New Zealand giant Fonterra -- at the centre of a health scare this week -- and China's Biostime, Xinhua said, citing the National Development and Reform Commission (NDRC).

In a corporate statement, Mead Johnson said it had been handed a penalty of 204 million yuan ($33 million).

Biostime said in a filing to the Hong Kong stock exchange that it had been given a 163 million yuan fine.

Fonterra, which has had to recall products in several countries this week over a botulism scare, was fined 4.5 million yuan, it said.

It cooperated fully with Chinese authorities and accepted their decision, it said.

"The investigation leaves us with a much clearer understanding of expectations around implementing pricing policies which is useful as we progress our future business plans," Fonterra's president for Greater China and India, Kelvin Wickham, said in a statement.

He added that Fonterra's fine was "in the lowest range" of the penalties handed out.

The NDRC, China's top economic planner, launched the investigation into high prices it said resulted from a monopoly-like situation, mostly targeting overseas firms. Several of them announced price cuts last month.

Xinhua said that three companies -- Wyeth, which is owned by Swiss giant Nestle, Japan's Meiji, and Chinese firm Beingmate -- had been exempted from punishment in the inquiry.

The NDRC said they provided important evidence and carried out active self-rectification, it added.


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