By Kazunori Takada and Michael Martina

China fined six companies, including Mead Johnson Nutrition Co, Danone and New Zealand dairy giant Fonterra, a total of $110 million following an investigation into price fixing and anti-competitive practices by foreign baby formula makers.

The other three penalised were Abbott Laboratories, Dutch dairy cooperative FrieslandCampina and Hong Kong-listed Biostime International Holdings, the National Development and Reform Commission (NDRC) said on Wednesday.

The fines, which follow a four-month antitrust probe by the NDRC, coincide with separate pricing investigations into 60 foreign and local pharmaceutical firms as well as companies involved in gold trading. Those probes have yet to conclude.

The official Xinhua news agency said the fines were a record for China, although it did not elaborate.

"These are really significant fines for China, which has typically not issued large fines for antitrust violations," said Peter Wang, an antitrust expert and Shanghai-based partner for law firm Jones Day.

Foreign infant formula is coveted in the world's second-biggest economy, where public trust was damaged by a 2008 scandal in which six infants died and thousands became ill after drinking milk tainted with the toxic industrial compound melamine.

Foreign brands account for about half of total sales and can sell for more than double the price of local formula. The infant milk market in China is set to grow to $25 billion by 2017 from $12.4 billion in 2012, according to data from Euromonitor.

The NDRC said in a statement the fines were for restricting competition, setting curbs on minimum prices for distributors and for using a variety of methods to disrupt market order.

It fined U.S.-based Mead Johnson 203.8 million yuan ($33.29 million); French food group Danone 172 million yuan; Biostime 162.9 million yuan; Abbott 77 million yuan; FrieslandCampina 48 million yuan and Fonterra four million yuan.

All of the companies said they would not contest the penalties.

Swiss giant Nestle, Japan's Meiji Holdings and Zhejiang Beingmate Scientific Technology Industry and Trade Co Ltd were not punished because "they cooperated with the investigation, provided important evidence and carried out active self-rectification," Xinhua quoted Xu Kunlin, the head of the NDRC's price department, as saying.

Xu said the probe began in March, but was only made public in early July. After the NDRC probe was announced, a number of companies, including Mead Johnson, Danone and Nestle, cut prices on their baby formula in China by up to 20 percent.

Chinese firm Biostime was fined the equivalent of 6 percent ofits 2012 China sales, the highest of those penalised, because it "seriously violated the anti-monopoly law and failed to actively take corrective action," Xu said. Biostime imports most of its products.

Mead Johnson, the maker of Enfamil formula, was fined the equivalent of 4 percent of its 2012 sales because it "did not actively cooperate with the investigation but did take active self-rectification measures," Xu added.

Danone, Abbott, FrieslandCampina and Fonterra were each fined 3 percent of last year's sales after they cooperated in the probe and corrected improper practices.

"As a good corporate citizen, we are committed to addressing the concerns raised by the government and authorities in the market in which we do business and will comply with the fine stipulated by the NDRC," FrieslandCampina said in an emailed statement.

Foreign firms not hurt

Analysts said the probe was possibly part of a broader Chinese plan to boost consumption of local infant milk products.

But they said the fines were unlikely to damage the reputation of the affected companies. If anything, foreign infant formula makers might increase their market share because of the price cuts.

"It will have an impact on domestic brands over the long term as the prices of high-end premium brands come down. Customers will tend to buy the foreign brands as the price gap between domestic and foreign brands narrows," said Jacqueline Ko, an analyst at Maybank Kim Eng Research.

Fonterra, the world's biggest dairy exporter, said it would give additional training to sales staff and review its distributor contracts in the wake of its fine.

"We believe the investigation leaves us with a much clearer understanding of expectations around implementing pricing policies," Kelvin Wickham, president of Fonterra Greater China and India, said in a statement.

Fonterra is embroiled in a separate milk powder contamination scare that has led to product recalls in China, Hong Kong and elsewhere in Asia.

The NDRC is one of China's most powerful government bodies, with a role in overseeing prices as well as broad economic policies.

Wang from Jones Day said that while a Chinese firm got the biggest rap on the knuckles, foreign companies were clearly no longer insulated from NDRC investigations.

"It is a shift in that the foreign companies are so prominently being pursued. But that is normal. That is the way you would expect the antitrust system to mature," Wang said.

The milk sector is still relatively young in China, with consumption of dairy products growing at an annual compound rate of 20 percent, a contrast to U.S. and European markets, where demand has been shrinking in the past decade.

Some analysts also said the pricing investigation could result in tougher rules governing imports.

The China Food and Drug Administration is proposing tightening conditions for the granting of licences for milk powder production, including requiring producers to have their own controlled milk sources and research and development capabilities.

In a statement late on Tuesday, the regulator said it was seeking public comment on the proposals, which also include requirements for licence holders to strengthen hygiene practices and management standards.

Mead Johnson said its fine would reduce its full-year earnings by about 12 cents per share, but it reiterated its 2013 earnings forecast for profit, excluding one-time items, of $3.22 to $3.30 per share.

Shares of Biostime, which has a market value of $3.3 billion, were up 5.3 percent at midday, beating a 0.3 percent drop in the benchmark index. It shares resumed trading after being suspended the day before.

发改委对合生元等六家乳粉企业罚款6.7亿元 

中国国家发展和改革委员会周三宣布，合生元 等六家乳粉生产企业因违反《反垄断法》限制竞争行为共被罚约6.7亿元人民币，成为中国反垄断史上开出的最大罚单。三家企业因配合执法机关调查并积极整改被免除处罚。

发改委称，涉案企业提出的整改措施包括立即停止违法行为；采取实际行动，消除过去违法行为的后果，使消费者获得切实利益。主动向反垄断执法机构报告达成垄断协议有关情况、提供重要证据，并积极主动整改的惠氏公司、贝因美、明治公司被免除处罚。

“乳企合生元公司因违法行为严重、不能积极主动整改被处上一年度销售额6%的罚款，约1.63亿元。不能主动配合调查但能积极整改的美赞臣公司被处上一年度销售额4%的罚款，约2.04亿元。”发改委网站刊登的公告援引发改委价格监督检查与反垄断局局长许昆林的话称。

“能够配合调查，并主动整改的多美滋、雅培（上海）、富仕兰（上海）、恒天然商贸（上海）公司分别被罚约1.72亿元、0.77亿元、0.48亿元、0.04亿元。分别占这些公司上一年度销售额的3%。”许昆林称。

从今年3月开始，根据举报，发展改革委对九家乳粉生产企业开展了反价格垄断调查。大量证据表明，涉案企业价格垄断具体的措施和手段主要包括合同约定、直接罚款、变相罚款、扣减返利、限制供货、停止供货等。

他指出，一旦下游经营者不按照涉案企业规定的价格或限定的最低价格进行销售，就会遭到惩罚。涉案企业的上述行为违反了《反垄断法》，不正当地维持了乳粉的销售高价，严重排除、限制同一乳粉品牌内的价格竞争，削弱了不同乳粉品牌间的价格竞争，破坏了公平有序的市场竞争秩序，损害了消费者利益。

今年以来发改委查处的三星、茅台和五粮液等企业价格垄断大案表明，中国反垄断机关对价格垄断不法行为查处力度在加大，对其他行业和企业是个警示。

中国婴幼儿营养品生产商--合生元国际控股有限公司 周三也刊登公告称，接受国家发改委反垄断罚款1.63亿元人民币。股份今早恢复交易。

合生元在联交所刊登公告指出，其全资附属公司广州合生元在上日(8月6日)接到发改委根据中国反垄断法的处罚决定，广州合生元决定放弃申请行政复议和提出行政诉讼，支付上述罚款，并不断完善和持续提高公司内部控制水平，确保公司各项经营决策均符合中国法律法规。

同时宣布接受罚款的，还有同被调查的美赞臣，该公司表示，将会支付约3,300万美元的罚款，但未对是否涉及指控事项进一步说明。

近几年“洋奶粉”频繁涨价，导致中国国内婴幼儿配方奶粉价格远高于国外，一般是欧美国家的两倍以上。国家发改委对五大外资奶粉品牌展开反垄断调查。

其后多家外资品牌包括瑞士雀巢、法国达能、美赞臣、雅培 等纷纷调低中国奶粉价格。合生元继以积分回购方式变相降价后，上月底再调低婴幼儿配方奶粉的出厂价及零售价，幅度为5-10%。

合生元复牌后涨5.26%，报44港元，今年以来股价上涨72%。（完）

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