China imposes heavy fines on dairy firms

China imposes heavy fines on dairy firms

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The Asian country of China has set the biggest fine for price fixing on August 7, 2013. The imposition of fines is the latest effort by authorities to provide a level playing field for industries.

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A top economic regulator – the National Development and Reform Commission – has imposed fines of about 670 million yuan. These fines have been imposed on six milk powder companies which are accused of price fixing and anti-competitive practices. The companies against which the fines have been imposed include Dumex, Mead Johnson, Friesland, Abbott, Fonterra and Biostime.

The recent announcement by the commission has been made after a recall of milk supplies from Fonterra this week, due to the possibility of contamination. The commission announced these fines more than a month after the NDRC stated that it was conducting the antitrust review. The fines also coincide with other pricing investigations into pharmaceutical firms, as well as companies which are involved in gold trading.

The latest investigations are a sign that China is making efforts in terms of fighting against price fixing and is trying to regulate the business market. China also responded to the foreign media – which stated that the Asian country is aiming at foreign brands to benefit its domestic industries – by saying that the allegations are baseless.

Photon Credits: CNN Money