NZ’s Fonterra cuts milk product prices in China amid probe

New Zealand’s Fonterra - the world’s largest dairy producer - will cut the price of one of it milk formula products in China, joining a growing list of firms responding to Beijing’s investigation into the sector.

Auckland-based Fonterra said it will reduce prices by up to 9 per cent for its Anmum brand of maternal milk products from Aug. 1. The move comes as the company prepares to enter China’s booming branded infant milk formula market later this year.

A number of international milk powder producers have cut prices in China after the country’s top economic planning agency said earlier this month it was investigating possible price-fixing and anti-competitive behaviour.

Fonterra’s managing director for China and India, Kelvin Wickham, said in a statement the move was aimed “to better meet consumer needs in light of recent industry-wide price revisions”.

Abbott Laboratories, French food giant Danone, Nestle, Mead Johnson Nutrition and Hong Kong-listed Biostime International Holdings have already announced reductions of up to 20 per cent on milk formula prices in China.

Drug pricing in China has also come under severe scrutiny, with China’s top regulators targeting British drugmaker GlaxoSmithKline, and announcing a crackdown on pricing in the wider pharmaceutical market.

China is a major export market for Fonterra. As well as its Anmum products, which are aimed at expectant mothers, it supplies the vast majority of milk powder imported by local producers for use in products ranging from Chinese branded milk formula to confectionary.