China fines baby formula firms $108m

2013-08-07 11:01
Shoppers look at imported infant formula near products from Mead Johnson at a shop in Beijing, China. (Ng Han Guan, AP)

Shoppers look at imported infant formula near products from Mead Johnson at a shop in Beijing, China. (Ng Han Guan, AP)

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Beijing - China has fined six mostly foreign baby formula companies a total of $108m 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 $33m.

Biostime said in a filing to the Hong Kong stock exchange that it had been given a $26.6m fine.

Fonterra, which has had to recall products in several countries this week over a botulism scare, was fined $735 000, it said.

It co-operated 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.

Read more on:    china

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