Beijing pricing probe on baby milk powder widened to cover Tetra Pak
The central government investigation of milk powder companies has spread to Tetra Pak, the world's biggest food packaging and processing company.
Meanwhile, Nestle, a Swiss food giant affected by the investigation, has said it will lower the prices of its milk powder on the mainland.
Tetra Pak, a Swedish firm with €11.16 billion (HK$112 billion) in sales last year, had been asked by the State Administration for Industry and Commerce to provide information on its mainland business, a company spokesman said. "We are fully co-operating with the officials," he said.
An industry source said one possible reason why Tetra Pak was being investigated was that its packaging cost was factored into the price of final food and beverage products such as packaged milk.
Demand for foreign formula brands has soared since 2008, when domestic formula adulterated with melamine was blamed for killing at least six infants and making nearly 300,000 ill. As Hong Kong and other markets curtailed sales, consumers on the mainland had to pay higher prices for foreign milk powder.
Wyeth Nutrition, a Nestle brand, was co-operating with the National Development and Reform Commission's (NDRC) investigation of infant formula pricing practices, a Nestle spokesman said.
"Following this investigation, Wyeth Nutrition decided to improve sales and marketing practices," he said. "To meet the NDRC's concerns on the affordability of infant formula to the Chinese consumer, Wyeth Nutrition decided to implement a price reduction of key products from July 8, 2013, through 2014."
The average price reduction for Wyeth Nutrition milk powder on the mainland would be 11 per cent, the Nestle spokesman said, with the biggest single price reduction 20 per cent. "Wyeth Nutrition also decided not to raise prices of any new products over the next year," he said.
The reform commission has also launched a price-fixing investigation into 60 domestic and international drug firms, including GlaxoSmithKline, Merck and Astellas.