China fines formula firms $108m for price-fixing

China said Wednesday it has fined six mostly foreign baby formula producers including New Zealand's scandal-hit Fonterra a total of $108 million for price-fixing, as it seeks to cool public anger over the sector.
The penalties -- also levied against firms from the US, France, the Netherlands, and one Chinese company -- came after a five-month inquiry by the National Development and Reform Commission (NDRC), China's top economic planner.
They were a "record high" in Chinese anti-monopoly rulings, the official Xinhua news agency said.
They also come in the middle of the latest safety scare over formula, in which Fonterra-related products have been recalled in several countries over concerns they could be tainted with a bacteria that can cause potentially fatal botulism.
It said Wednesday that all the affected items had been removed from retailers' shelves.
China is the world's biggest market for formula and foreign-branded products are in high demand after repeated safety scandals involving domestic products -- including one in 2008 when six children died and 300,000 were sickened.
Prices are high as a result, leading to frustrations among consumers.
The NDRC said in a statement it fined Mead Johnson and Abbott from the US; Dumex, a subsidiary of France's Danone; a China arm of Royal FrieslandCampina of the Netherlands; Fonterra and China's Biostime.
The firms set minimum prices with distributors and punished dealers who did not comply, the NDRC said, and their actions reduced competition and "unjustifiably maintained high milk powder prices".
"They undermined the fair market competition order and harmed consumers' interests," it added.
Mead Johnson said it had been fined 204 million yuan ($33 million), adding it remains committed to the country that is "one of the company's most important markets".
Biostime, based in the southern city of Guangzhou, said in a filing to the Hong Kong stock exchange that it would pay a fine of 163 million yuan "in a timely manner".
The value is around six percent of the company's sales revenue in the previous year -- the highest rate among all firms punished -- because its violations were "grave" and it "failed to rectify its wrongdoings in an active way", the NDRC said.
Fonterra said it was fined 4.5 million yuan and accepted the decision.
Its chief executive Theo Spierings said all tainted products, which were distributed in countries ranging from New Zealand to Saudi Arabia, had been removed.