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China launches anti-trust probe into baby formula

Xinhua | Updated: 2013-07-02 15:22
BEIJING -- China's top economic planner is conducting an anti-trust probe into several baby formula companies to investigate allegations of price fixing, the Shanghai Securities Journal reported Tuesday.

The National Development and Reform Commission (NDRC) said it is investigating several baby formula companies that are believed to have a monopoly in the Chinese market, according to the report.

Several baby formula manufacturers, including Biostime, MeadJohnson and Nestle, have been accused of violating anti-monopoly laws via high prices and limited market competition, the report said.

Companies that are found to have violated the law will be punished accordingly in order to protect the market and safeguard consumers' interests, the report said.

Biostime confirmed last week that the company's wholly owned subsidiary in Guangzhou is being investigated by the NDRC.

Demand for baby formula is booming in China, but confidence in domestic products has plummeted since 2008, when melamine-tainted milk killed six infants and sickend 300,000 others.

Chinese from the mainland have since flocked to Hong Kong and other markets to buy foreign-brand baby formula.

The government recently has issued a series of policies, including technological restructuring and the establishment of a quality guarantee system, to improve the quality of domestic baby fomula and raise public confidence in domestic formula producers.

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