4 Jul 2013

Milk powder price fixing inquiry in China

5:29 am on 4 July 2013

The Chinese government has confirmed it's investigating price fixing by some foreign manufacturers of milk powder for infants.

The National Development and Reform Commission suspects that some well known brands may be taking advantage of a tainted milk formula scandal five years ago, in which six infants died and 300,000 more were ill.

Foreign brands are popular because tainted milk scandals in China have created a distrust of domestic rivals.

Foreign brands reportedly account for about half of all infant milk sales in China.

The BBC reports the companies involved - which include Nestle SA, Danone, Mead Johnson Nutrition and Abbott Laboratories - say they will co-operate with the inquiry.

After the 2008 scandal, formula from several major domestic dairy companies was found to contain melamine, an additive that falsely boosts the protein levels in milk.

In December 2011 and July 2012, two Chinese companies recalled baby formula containing high amounts of aflatoxin, a carcinogen produced by fungus in cows' feed.

Last year, another company issued a separate recall after "unusually high" levels of mercury were found in its main line of infant milk powder.