Industryweek 4759 China Baby Formula

More Firms Cut Baby Formula Prices Amid China Probe

July 9, 2013
At least four more firms said they would slash prices in the world's largest market for baby formula, according to separate statements.

SHANGHAI—More companies have cut baby formula prices in China after coming under government scrutiny in a widening price-fixing investigation.

At least four more firms said they would slash prices in the world's largest market for baby formula, according to separate statements.

The government has yet to confirm any investigation, but state media reported that China's National Development and Reform Commission launched a probe of mainly foreign companies over high prices.

U.S. healthcare firm Abbott Laboratories (IW 500/33) was "actively cooperating" with the investigation and would lower prices by 4% to 12%, the company said in a statement late Monday.

Dutch firm Royal FrieslandCampina, which produces the Friso brand, said it cut China prices by 5% from Monday.

A unit of Japanese dairy producer Meiji (IW 1000/318) and a domestic formula manufacturer, Zhejiang Beingmate Technology Industry & Trade, neither of which had been named as being investigated, also said they would reduce prices.

The cuts followed similar moves by France's Danone (IW 1000/171) and Swiss food giant Nestle, which earlier this month cut prices for baby milk by as much as 20%.

The probe comes in the face of huge demand for foreign baby formula products in China after a 2008 scandal involving tainted milk that killed six children and sickened more than 300,000.

The government has vowed to crack down on safety violators and called for strict monitoring of milk powder production, in an attempt to restore public trust in domestic companies.

Copyright Agence France-Presse, 2013

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