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China: 6 baby formula cos fined over $108 million for price fixing

China on Wednesday fined 6 infant formula makers $108 million for fixing prices following an anti-trust investigation by the National Reform and Development Commission, the country's top economic planner.

world Updated: Aug 08, 2013 02:49 IST
Sutirtho Patranobis

China on Wednesday fined 6 infant formula makers $108 million for fixing prices following an anti-trust investigation by the National Reform and Development Commission, the country's top economic planner.

The 6 companies fined were Fonterra - the New Zealand company whose products were banned by China last week over a poisoning scare, Mead Johnson, Dumex, Abbott, Friesland and Biostime, state media quoted an NDRC official saying.

Three other companies, including Wyeth, Beingmate and Meiji, were exempt from punishment because they cooperated with the government investigation, provided important evidence and actively took self-rectification measures, Xu Kunlun chief of the price department of the NDRC, told state media on Wednesday.

NDRC's investigations were launched in March this year. During the investigation, the authorities found companies had set minimum resale prices for distributors. The companies would levy fines on the distributors if products were sold at a lower price.

The manufacturers were accused of violating anti-monopoly laws via high prices and limited market competition, the report said.

Demand for baby formula is booming in China, but confidence in domestic products plummeted since 2008, when melamine-tainted milk killed six infants and sickened 300,000 others.

Chinese from the mainland have since flocked to Hong Kong and other markets to buy foreign-brand baby formula.

Last week, China had banned dairy products from New Zealand and Australia following scare over tainted baby formula.

The recall of the dairy products began after the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) - China's top monitoring body for food products - announced a list of four domestic companies that had imported whey products that may be have been contaminated with "clostridium botulinum", bacteria that produces toxins.

Resulting infection could lead to paralysis and death. Symptoms include nausea, vomiting, drooping eyelids, difficulty in swallowing and paralysis.