Mengniu smear suspect 'co-operating with police'

PUBLISHED : Friday, 22 October, 2010, 12:00am
UPDATED : Friday, 22 October, 2010, 12:00am

Dairy giant Mengniu said yesterday that a business manager with the group was co-operating with police over an alleged smear campaign against rival company Yili, but it denied the company had masterminded the attack.

The manager is not in senior management, a company statement said. It said the manager was co-operating with the relevant authorities. The man was named by police yesterday as An Yong, a brand manager for Mengniu's children's milk products.

'To the best knowledge of the company, none of the directors or senior management of the group were arrested and all directors and senior management attended the office as usual,' the statement said.

The statement denied the group had 'planned, organised or acted relating to the claim [that] rival companies' products triggered precocious puberty'.

Earlier yesterday Xinhua reported that police had said that a smear campaign was carried out against Yili by an employee of its biggest competitor Mengniu. Three employees of an online marketing firm BossePR were also arrested.

Liu Jiang, a police official in Hohhot, Inner Mongolia, told China Central Television yesterday that a police investigation showed that the manager's action was a personal act and not linked to the company.

Police in Hohhot, where both dairy giants are based, told Xinhua the series of articles criticising Yili's children's milk, posted online in July, was 'a case of damaging business reputation' and 'organised and planned with malice aforethought and carried out for profit'.

The statement came immediately after Yili's statement, which said employees from Mengniu and an online marketing firm had been arrested.

Police said the attack had been organised by An Yong and carried out by three employees from BossePR, a Beijing online marketing firm that has been affiliated with Mengniu for years, according to Xinhua.

Police told Xinhua the suspects had admitted that the strategy was to attack Yili's children's milk products to increase the value of Mengniu's.

An and the BossePR staff made detailed plans on July 14 on how to attack the Yili products, police said. It included smear postings on the internet, which were picked up by news portals.

They also had writers invent parents or pregnant women to complain about Yili products and had mobile bloggers carry and comment on the articles in a bid to persuade mobile customers to boycott Yili's products, police said.

The campaign lasted a month, and the most popular posting received more than 200,000 hits. About 280,000 yuan (HK$326,000) was spent on the operation, according to the police.

Yili, which was aware of the unusual postings in July, called Hohhot police on July 30, who carried out a two-month investigation.

The three BossePR employees arrested are Hao Liping, Zhao Ning and Ma Ye. Two employees from another online marketing firm are being sought by police.