China probes alleged price fixing of baby formula
Jul. 03, 2013
BEIJING (AP) — China has launched an investigation into alleged price fixing by some foreign makers of infant formula, including Danone and Nestle SA, the country's top economic planning agency confirmed Wednesday.
The state-run People's Daily reported Tuesday that companies also including U.S.-based Abbott Laboratories and Mead Johnson Nutrition Co., as well as Dutch-based FrieslandCampina, are under investigation for allegedly violating anti-monopoly laws by charging high prices and limiting competition.
A spokesman for the National Development and Reform Commission, the investigating body, confirmed the report and said the probe was continuing. He refused to give his name, as is common with Chinese officials.
Chinese demand for foreign milk formula has risen in the wake of scandals that have left many parents wary about domestically produced infant formula. In 2004, fake Chinese milk powder caused malnutrition deaths in at least a dozen babies. That was followed by a melamine-tainted milk scandal in 2008 that killed at least six babies and sickened nearly 300,000 others.
Nestle spokeswoman Melanie Kohli said that the company's Wyeth Nutrition unit has been actively cooperating with the commission's review of the industry, but that it wasn't appropriate for the company to comment on the details of the review at this time.
Katherine Huang, Shanghai-based spokeswoman for FrieslandCampina, said the company was cooperating with Chinese authorities "to comply with pricing policies and regulations."
Mead Johnson said in a statement that it is committed to providing high-quality, safe products to its consumers, and that it is fully cooperating with the review.
Abbott spokeswoman Kelly Morrison said that the company is aware of the inquiry and is cooperating with the commission.
In May, Chinese Premier Li Keqiang told a meeting of Cabinet officials that the quality of infant formula should be tested with the same standards used for medicines and that each step of the production process must be monitored.