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Wyeth cuts prices amid formula probe

Shanghai Daily, July 4, 2013

• Wyeth Nutrition, the infant formula company bought by Nestle last year, is cutting prices in China, the first such move since it was one of five foreign infant milk formula companies put under investigation for possible price-fixing.

  Wyeth Nutrition, the infant formula company bought by Nestle last year, is cutting prices in China.

  
  
  

  Wyeth said in a statement it had been actively cooperating with China's National Development and Reform Commission and was responding by cutting prices and improving sales and marketing practices.

  Nestle, Danone, Mead Johnson Nutrition Co and Abbott Laboratories confirmed on Tuesday that they were being investigated for possible price-fixing and anti-competitive practices.

  Mothers turned away from Chinese milk powder in 2008 when infant formula tainted with the melamine killed at least six babies and made thousands sick with kidney stones.

  China has since made efforts to crack down on persistent food safety problems that have included chemical-laced pork and infant milk contaminated with cancer-causing agents.

  "Wyeth Nutrition decided to implement a price reduction of key products from July 8 through 2014. The average reduction will be at 11 percent with the biggest single product price reduction at 20 percent," it said.

  Analysts said the investigation could result in fines and tougher rules governing imports into an infant milk market set to grow to US$25 billion by 2017. The firms could face fines of up to 10 percent of annual sales, Xinhua news agency quoted experts as saying.

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