CHINA: FrieslandCampina next to cut formula prices

By Katy Askew | 8 July 2013

FrieslandCampina cuts infant formula prices in China

FrieslandCampina cuts infant formula prices in China

FrieslandCampina has confirmed that it will follow rivals Nestle and Danone and cut the price of infant formula products sold in China.

The Dutch dairy group said that it will lower the price of its "full range" Friso infant formula products sold in China by 5% from today (8 July).

The move comes in response to an official investigation into pricing in the market, which is being conducted by China's Price Supervision and Anti-monopoly Bureau, under the auspices of the National Development and Reform Commission.

FreislandCampina emphasised it is "fully co-operating" with the probe.

"FrieslandCampina supports the NDRC's objective to ensure fair pricing; the company will reinforce compliance with pricing and anti-trust regulations. FrieslandCampina commits to adjusting contractual terms to explicitly emphasize adherence to China's anti-monopoly law. FrieslandCampina will also enhance its code of conduct and provide comprehensive anti-trust training based on Chinese laws," the company said.

The official investigation first came to light two weeks ago, when Hong Kong-listed Biostime International admitted it was under investigation in a regulatory filing.

Biostime said the "main purpose" of the investigation was "in relation to an alleged violation of Article 14 of Anti-Monopoly Law of the People's Republic of China". Specifically, Biostime said the authorities concerns related to the possibility firms were "managing the market sales prices at which the distributors and retail sales organisations" sell products.

Article 14 of China's anti-monopoly regulations prohibits agreements among business operators and their trading parties relating to "fixing the price of commodities for resale to a third party"; "restricting the minimum price of commodities for resale to a third party"; or "other monopoly agreements" as determined by the Anti-monopoly Authority.

FrieslandCampina's price reduction follows similar actions by rivals. Nestle confirmed that its Wyeth Nutrition arm will cut prices from today "through 2014" on "key products". On average, prices will fall by 11%; Nestle said the largest cut will be of 20%. Meanwhile, Danone said that it is "preparing a price reduce proposal"

Other infant formula makers under investigation include Mead Johnson and Abbott Laboratories. In a statement, Mead Johnson said that it is "fully cooperating" with the official investigation.

Show the press release

FrieslandCampina reduces its price of the full range of Friso products in China by 5% FrieslandCampina Trading (Shanghai) Co., Ltd. announces today it is fully cooperating with the Price Supervision and Anti-Monopoly Bureau under China’s National Development and Reform Commission (NDRC) as part of an anti-trust investigation. FrieslandCampina supports the NDRC’s objective to ensure fair pricing; the company will reinforce compliance with pricing and anti-trust regulations. FrieslandCampina commits to adjusting contractual terms to explicitly emphasize adherence to China’s Anti-Monopoly Law. FrieslandCampina will also enhance its Code of Conduct and provide comprehensive anti-trust training based on Chinese laws. To support Chinese consumers and offer more value, FrieslandCampina will per July 8th, 2013 reduce its price of the full range of Friso products in China by 5%. FrieslandCampina’s value promise includes the unique grass-to-glass system, in which the company invests in managing the entire supply chain from processing, marketing and distribution to provide consumers with safe and premium products. Friso for China is 100% produced and packaged in the Netherlands and distributed exclusively by FrieslandCampina. FrieslandCampina remains highly committed to the China market. The company continues to fully cooperate with local authorities in every market in which we have a presence, and plays an important role in providing dairy products for hundreds of millions of people all over the world every day.

 

Royal FrieslandCampina Every day Royal FrieslandCampina provides around 1 billion consumers all over the world with food that is rich in valuable nutrients. With annual revenue of 10.3 billion euro FrieslandCampina is one of the world’s five largest dairy companies. FrieslandCampina supplies consumer products such as dairy-based beverages, infant & toddler nutrition, cheese and desserts in many European countries, in Asia and in Africa. Products are also supplied to professional customers, including cream and butter products to bakeries and catering companies. FrieslandCampina also supplies ingredients and half-finished products to manufacturers of infant & toddler nutrition, the food industry and the pharmaceutical sector around the world. FrieslandCampina has offices in 28 countries and employs a total of 19,946 people. FrieslandCampina’s products find their way to more than 100 countries. The Company’s central office is in Amersfoort. FrieslandCampina’s activities are divided into four market-oriented business groups: Consumer Products Europe; Consumer Products International; Cheese, Butter & Milkpowder and Ingredients. Well-known brands include: Campina, Chocomel, Fristi, Friesche Vlag, Mona, Optimel, Vifit, Milner, Frico, Botergoud, Valess, Appelsientje, DubbelFrisss, CoolBest, Landliebe, Fruttis, Joyvalle, Yazoo, Milli, Pöttyös, Napolact, NoyNoy, Dutch Lady, Frisian Flag, Foremost, Friso, Peak, Rainbow, Debic Valess, DMV, Kievit, Domo, Creamy Creation and Nutrifeed. The Company is fully owned by Zuivelcoöperatie FrieslandCampina U.A, with 19,487 member dairy farmers in the Netherlands, Germany and Belgium is one of the world’s largest dairy cooperatives. 

Original source: FrieslandCampina

Sectors: Baby food, Dairy, Emerging markets

Companies: FrieslandCampina, Nestle, Danone, Mead Johnson

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