China fines six baby formula firms for fixing price

China today slapped a record $ 108 million fine on six baby formula companies, including Mead Johnson and Fonterra after an anti-trust probe found them guilty of price fixing in the country's booming dairy market.

 

The six companies which are fined are Biostime, Mead Johnson, Dumex, Abbott, Fonterra and Friesland, according to state-run Xinhua news agency.

 

These companies have been issued fines of $ 108 million, country's top economic planner the National Development and Reform Commission (NDRC) announced today.

 

"Biostime was fined about $ 27 million or 6% of its sales revenue in 2012 as it seriously violated the anti-monopoly law and failed to actively take corrective action," said Xu Kunlin, chief of the Price Department of NDRC.

 

US-based Mead Johnson was fined about $ 33.45 million or 4% of their last year revenue, because it "did not cooperate in the investigation and take active self-rectification measures, Kunlin said.

 

Fonterra, Dumex, Abbott and Friesland each received a fine equal to 3% of their 2012 revenue.

 

They were fined about $ 66,000, $ 29 million, $ 12.6 million and $ 7.8 million respectively.

 

Kunlin said the above four companies cooperated in the probe and actively moved to correct their improper practices.

 

Three other companies, Wyeth, Beingmate and Meiji, were exempted from punishment as they have cooperated in the government investigation along with providing evidences and actively taking self-rectification measures, Kunlin said.

 

"In the probe initiated against these nine companies in March, NDRC found that they set the minimum resale prices for distributors," Kunlin said.

 

The distributors who sold their products at a price lower than fixed minimum price are punished because they maintained milk powder prices at a high level which restricted the competition in market and harm the consumer interests.

 

Meanwhile, China has recalled New Zealand-based Fonterra's two batches of Abbott-brand products after it admitted them to be tainted by the botulinum bacteria.