8 Aug 2013

Fonterra caught up in spate of Chinese price-fixing fines

1:28 pm on 8 August 2013

China's fining of six infant milk companies, including Fonterra, for price-fixing is the latest in a spate of fines for international companies.

Among those collectively fined $US108 million by the Chinese authorities recently have been America's Mead Johnson and Abbott Laboratories; Dumex, a subsidiary of France's Danone; Friesland from the Netherlands; Fonterra; and China's Biostime.

Last week, the healthcare giant Johnson and Johnson was accused of misconduct in China and ordered to pay damages to a distributor - and a corruption investigation launched by the Chinese authorities against GlaxoSmithKline continues.

A professor of business economics at Henley Business School in Britain, Dominic Swords, says it's difficult to tell whether the firms are guilty, or just dealing with the fines in order to carry on business as normal.

He says he believes the Chinese authorities are pursuing this course of action partly to encourage domestic producers.