Danone, Nestlé, FrieslandCampina facing Chinese infant formula pricing probe


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Danone and Nestlé facing Chinese infant formula pricing probe

Related tags Infant formula Hong kong Price Danone

A host of infant formula manufacturers, including Nestlé, Danone, and FrieslandCampina, are under investigation in China over the high pricing of infant formula and suspected anti-trust violations.

According to reports from China, the National Development and Reform Commission (NDRC) has launched a probe into the pricing practices employed by infant formula manufacturers, Danone, Mead Johnson, Abbott Laboratories, FrieslandCampina, Nestlé-owned Wyeth, and Chinese firm, Biostime International.

DairyReporter.com understands that the NDRC is in the process of reviewing evidence that suggests the manufacturers in question drove up the retail price of their infant formula products in China.

According to reports, infant formula prices in China have increased by around 30% since 2008.

Formula manufacturers “cooperating”

The NDRC was unavailable to comment on the reports, but Nestlé, FrieslandCampina and Danone did confirm that an investigation into their Chinese pricing practices was underway.

All confirmed that they are “cooperating”​ with Chinese authorities.

“Wyeth Nutrition has been actively cooperating with NDRC’s on-going review of the industry,”​ a Nestlé spokesperson told DairyReporter.com. “It is not appropriate for us to comment on the details of this review at this stage of the process.”

A Danone spokesperson mirrored the statement issued by Nestlé, only stating:“We are providing full cooperation to the authorities.”

Responding to the reports, FrieslandCampina spokesman, Jan-Willem ter Avest confirmed that an investigation has been launched by Chinese authorities.

“I don’t know much about it, only that there is an investigation going on - I can confirm that,”​ he said. “We are fully cooperating with local authorities in China on this.”

DairyReporter.com also approached Mead Johnson and Abbott Laboratories in regards to the investigation, but neither was available to comment prior to publication.

Managing market sale prices

Reports regarding the investigation initially emerged late last week.

In a statement filed with the Hong Kong Stock Exchange on Thursday 30 June, Guangzhou-based infant formula manufacturer, Biostime International Holdings, revealed that it was the subject of an NDRC investigation. 

“The main purpose of the investigation is in relation to an alleged violation of Article 14 of Anti-Monopoly Law of the People’s Republic of China by Biostime Guangzhou in managing the market sales prices at which the distributors and retail organisations sell our products,”​ said Biostime’s stock exchange filing.

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