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Chinese price fixing fines for powdered milk makers

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Chinese price fixing fines for powdered milk makers
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China has fined a number of milk powder makers for price fixing.

Six companies faced penalties after they were accused of restricting competition and colluding to disrupt the market.

They are Mead Johnson Nutrition and Abbott Laboratories, which are based in the US, French firm Danone, Dutch dairy cooperative FrieslandCampina, Hong Kong-listed Biostime International Holdings and New Zealand dairy giant Fonterra.

They were fined the equivalent of 82.6 million euros in total. Mead Johnson received the biggest fine, Fonterra the smallest because the penalties were based on a percentage of last year’s sales.

Analysts said that is high by Chinese standards and the official Xinhua news agency said the fines were a record in the country.

Three other firms, including Switzerland’s Nestle, were not punished as they cooperated with the investigation.

Foreign made milk powers for infants are popular in China after public trust was damaged by deaths from contaminated locally-produced formula in a 2008 scandal.

Foreign brands account for about half of total sales and can sell for more than double the price of local ones.