A Chinese state agency has fined six baby formula companies $110 million for alleged price fixing. The companies include US-based Mead Johnson, French-based Danone and New Zealand’s Fonterra. According to authorities, the companies violated the law by setting a minimum price for formula, raising the cost for consumers. Regulators say there was no direct collusion between the companies.
“This concept of setting minimum prices is common practice in many markets. Companies do this because they want to maintain an image as a premium brand,” says the BBC’s Martin Patience from Beijing. “But here in China, it appears that the regulators see this as illegal, and that’s why these companies have been fined.”
The baby formula industry is worth nearly $12 billion in China, and foreign brands account for about two thirds of the market. After six babies died from contaminated formula that was manufactured domestically in 2008, Chinese parents have shown a willingness to pay a premium for foreign brands.
If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air. But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.
Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.
When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.