China probes alleged price fixing of powder

BEIJING - The Associated Press

China has launched an investigation into alleged price fixing by some foreign makers of infant formula, including Danone and Nestle SA, the country’s top economic planning agency confirmed today.

The state-run People’s Daily reported Tuesday that companies also including U.S.-based Abbott Laboratories and Mead Johnson Nutrition Co., and Dutch-based FrieslandCampina are under investigation for allegedly violating anti-monopoly laws by charging high prices and limiting competition.

A spokesman for the National Development and Reform Commission, which is the body investigating, confirmed the report and said the probe was continuing. He refused to give his name, as is common with Chinese officials.

Chinese demand for foreign milk formula has risen in the wake of scandals that have left many parents wary about domestically produced infant formula.

In 2004, fake Chinese milk powder left caused malnutrition deaths in at least a dozen babies. That was followed by a melamine-tainted milk scandal in 2008 that killed at least six babies and sickened nearly 300,000 others.

Nestle spokeswoman Melanie Kohli said that the company’s Wyeth Nutrition unit has been actively cooperating with the commission’s review of the industry, but that it wasn’t appropriate for the company to comment on the details of the review at this stage of the process.

Mead Johnson said in a statement that it is committed to providing high-quality, safe products to its consumers, and that it is fully cooperating with the review.

Abbott spokeswoman Kelly Morrison said that the company is aware of the inquiry and is cooperating with the commission.