CHINA: Mead Johnson warns of possible corruption law violations
Mead Johnson investigates promotional payments in China
Mead Johnson is investigating promotional payments made by its Chinese subsidiary, which the infant formula group said may have broken the US Foreign Corrupt Practices Act and local laws.
In a filing with the US Securities and Exchange Commission this week, Mead Johnson said the investigation is being conducted by "outside legal counsel" and overseen by a committee of independent members of its board. The move follows a SEC request for documents relating to the US business' activities in China.
"The company's investigation is focused on certain expenditures that were made in connection with the promotion of the company's products or may have otherwise been made. Certain of such expenditures were made in violation of company policies and may have been made in violation of applicable US and/or local laws, including the US Foreign Corrupt Practices Act (the "FCPA")," Mead Johnson said.
The company said it was co-operating with the SEC and "other governmental authorities".
Mead added it was unable to "predict the scope, timing or outcome" or "regulatory or legal actions that may be commenced".
"If a violation of the FCPA or other laws is determined to have occurred, the Company could become subject to monetary penalties as well as civil and criminal sanctions," Mead said.
Last year, the company's profits were dented by a US$33m fine imposed by China's anti-trust regulator, the NDRC, as part of its review of the marketing and pricing practices of international formula manufacturers. The fine was part of a wider investigation into competition in the infant formula category and Mead Johnson was one of a handful of companies found to violate local competition regulations. In total, the NDRC handed out fines totalling $108m, the biggest anti-trust ticket in China's history.
Over the next fortnight, we'd like to hear how you see the outlook for your business in 2014.
Now in its third year, the just-food Confidence Survey provides a snapshot of how you and your colleagues in the industry see the year unfolding. The latest survey is live and takes just a few moments to fill in.
In the coming weeks, we'll be reporting on the highlights from the survey in a free webinar live on just-food.com.
As a thank you for filling in the survey, you'll receive an executive summary detailing the results.
Mead Johnson Nutrition Company - Strategy and SWOT Report, is a source of comprehensive company data and information. The report covers the company’s structure, operation, SWOT analysis, product and s...
TechNavio's Analysts forecast the Global Baby Food and Formula market to grow at a CAGR of 5.4 percent over the period 2012-2016. One of the key factors contributing to this market growth is the growi...
Synopsis Baby Food Canada examines the trends in the baby food market for 2006-2012, with forecasts to 2018. It examines how live birth rates, breastfeeding trends, the economic crisis, new product a...
TechNavio's analysts forecast the Baby Food and Formula market in the US to grow at a CAGR of 2.76 percent over the period 2013-2018. One of the key factors contributing to this market growth is the i...
- Why Arla upbeat about LatAm prospects
- M&A Watch - Could Cloetta be takeover target?
- Comment: Can Applegate retain trust under Hormel?
- How the Applegate acquisition will benefit Hormel
- Sweets & Snacks Expo: just-food's pick
- Yildiz eyeing further deals - reports
- PAI, Pamplona "eyeing Bakkavor stake"
- Weetabix gets new private-equity investor
- Heinz, Boulder face off in Smart Balance TM spat
- FrieslandCampina ends Bongrain German tie-up
- Successful New Product Development Strategies in the Food, Drinks and Personal Care Market
- ALDI 2015: Radically transforming Anglo Saxon grocery markets
- The Future of the Ice Cream Market in the United Kingdom to 2019
- Consumer Foodservice in Indonesia
- Marks & Spencer (Asia Pacific) Ltd in Retailing (Hong Kong, China)