Two foreign baby milk companies have announced plans to cut the price on their products. This comes just after China’s top economic planning body launched a probe into alleged price fixing.
The National Development and Reform Commission says foreign formula producers, including Danone, Nestle and Mead Johnson, are violating anti-monopoly laws by charging high prices. China is by far the world’s largest market for baby formula. But a 2008 tainted milk powder scandal, which killed six infants and sickened more than 300,000 has prompted domestic consumers to shun local brands and created huge demand for the foreign product. Since then, foreign milk powder companies increased their prices in China by around 30 percent. Foreign brands now account for more than half of the market share in China.