NZ's Fonterra cuts milk powder prices in China amid probe
LONDON, July 17
LONDON, July 17 (Reuters) - New Zealand's Fonterra - the world's largest dairy producer - will cut some milk powder prices in China, a newspaper reported on Wednesday, joining a growing list of firms responding to Beijing's investigation into the sector.
A number of international milk powder producers have cut prices in the country after China's top economic planning agency said earlier this month it was investigating producers for possible price-fixing and anti-competitive behaviour.
Auckland-based Fonterra will reduce prices by up to nine percent for its Anmum-branded range of formulated milk products in China, the New Zealand Herald reported.
Fonterra managing director for China and India, Kelvin Wickham, said in an emailed statement to the paper that the move was aimed "to better meet consumer needs in light of recent industry-wide price revisions".
Fonterra's European spokesman was unable to confirm the price reduction, and Chinese and global spokesmen for the company were not immediately available.
China is one of Fonterra's largest export markets.
Abbott Laboratories, French food giant Danone SA , Nestle SA, Mead Johnson Nutrition Co and Hong Kong-listed Biostime International Holdings Ltd have already cut milk powder prices in China.
Drug pricing in China has also come under severe scrutiny, with China's top regulators targeting British drugmaker GlaxoSmithKline PLC, and announcing a crackdown on pricing in the wider pharmaceutical market.
Demand for international milk powder spiked in China after parents turned away from Chinese products in 2008 when infant formula tainted with the industrial compound melamine killed at least six babies and made thousands sick with kidney stones.
Last year Fonterra was the fourth largest milk powder producer in China in terms of market share, according to data from Euromonitor, and has plans to build a milk-processing plant in China over the next few years.
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