China fines six foreign firms for price fixing

Chinese regulators have fined six foreign companies a total of more than $100 million (€75 million) for price fixing, as Beijing wraps up a high-profile investigation of the country’s milk formula market.

Mead Johnson, Fonterra and Hong Kong-listed Biostime International Holdings yesterday confirmed that they had reached settlements with Chinese regulators after an official review of their pricing practices in the country.

The National Development and Reform Commission, which polices some aspects of China's 2008 antitrust law, said it had also fined Abbott, Dumex and Friesland.

The three companies could not immediately be reached for comment.

According to the commission, the six fines totalled 670 million renminbi (€82 million).

Chinese demand for foreign-branded milk powder has surged in the wake of safety scares in the domestic market, starting with melamine-tainted milk in 2008 that caused the death of several babies and left thousands of others sick.

As China’s economic growth rate threatens to slow below the government’s official target of 7.5 per cent, Beijing is concerned about growing public anger over the price and quality of essential goods and services such as baby milk formula.

Other companies caught up in the Chinese government's expansive regulatory dragnet in recent months include Apple, GlaxoSmithKline and Volkswagen.

Mead Johnson of the US said it had agreed to pay a penalty of Rmb203.7 million, while New Zealand’s Fonterra was hit with a smaller fine of Rmb4.4 million. Neither company intends to contest the fines.

Mead Johnson and Fonterra both declined to comment on the nature of the violations identified by investigators.

The reform commission could not immediately be reached for comment. – (Copyright The Financial Times Limited 2013)