Danone to name new management at China unit after bribery scandal

French food maker Danone said it will appoint new management at its Dumex infant milk powder operation in China and has suspended a nutrition programme for mothers in the wake of a bribery scandal at Chinese hospitals.

Dumex China expressed “deep regret” for what it called shortcomings over a programme that was intended to raise standards in paediatric care and included advice on nutrition.

The company launched an investigation after the official China Central Television (CCTV) reported in September that Dumex had bribed doctors and nurses across hospitals in northern China to recommend its infant formula to mothers.

Authorities in the northern city of Tianjin had punished 13 medical workers for taking bribes to recommend the infant formula, the local government said on Monday.

China is a magnet for foreign milk powder makers, with the country’s US$12.4 billion market expected to double by 2017.

But foreign firms are under intense scrutiny after a spate of media reports alleging corrupt sales practices in the industry. Authorities in August also fined a group of mostly foreign milk powder producers including Danone a total of US$110 million for price fixing.