International companies to reduce baby formula prices in China

International infant formula producers in China have announced plans to reduce the price of baby milk formula products, a move which follows an investigation by Beijing for alleged price-fixing and anti-competitive activity by foreign companies.

Several international firms such as Danone, Nestlé, Royal FrieslandCampina, Abbott Laboratories and Mead Johnson Nutrition are under investigation by the Chinese authorities.

French food giant Danone stated that it would lower the price of its Dumex Baby Food products by 5% to 20%.

According to Danone, Dumex has already launched an internal review with respect to relevant provisions of antitrust law in order to ensure that its operations comply with relevant law and regulations.

The company has co-operated with China’s National Development and Reform Commission (NDRC) investigation – China’s economic planning body – and will maintain today’s price reductions for the next year, Danone said.

Earlier this month, Swiss food giant Nestlé announced that it will lower the prices of its Wyeth Nutrition range of infant formula products by an average of 11% and freeze prices on all new products for the next year.

Japanese dairy producer Meiji and China-based Zhejiang Beingmate Technology Industry & Trade also noted that they would lower the prices of baby food products.

Even after the price cuts announced by the companies, China is continuing the investigation, which may result in fines as well as tougher rules for international companies in the infant milk market.

The demand for international baby formula brands increased significantly following a 2008 scandal involving tainted milk that killed six children and sickened over 300,000.