Dumex faces corruption allegations

Dumex faces corruption allegations

Danone has launched an investigation into allegations it bribed hospitals to promote its baby food products in China.

According to a report by China Central Television, Danone employees paid medical staff at a hospital in Tianjin to promote Dumex products to the parents of newborn children.

The report cited a former Dumex sales representative, who alleged the company gave several hundred thousand yuan in "gifts" to the hospital every year.

CCTV also claimed to have seen a document detailing payments to doctors, with their bank details and amounts paid. The document reportedly showed staff at the hospital had received about CNY300,000 (US$49,000) in total each month from Dumex.

Responding to the accusations, Danone said it is "extremely shocked" by the report.

"We will immediately launch the investigation on it," a spokesperson for the group told just-food.

The spokesperson emphasised the importance the company places on compliance in the markets in which it operates. "Dumex Baby Food Co Ltd. strictly adheres to Chinese laws and regulations, including Administrative Measures for Marketing of Breastmilk Substitutes. We have set up strict management system, including severe punitive measures against all violation activities."

These fresh allegations follow on the heels of an antitrust investigation by Chinese regulators that found Danone, among others, guilty of breaching competition rules in the market. Danone was found to be involved in "various forms of resale price maintenance" and the business was fined 3% of last year's sales in China, totalling CNY172m.