Wednesday 17th July 2013
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Fonterra Cooperative Group, the world's biggest dairy exporter, cut the price of its Anmum-branded products in China as the local regulator looks at potential price manipulation by major foreign firms selling into the world's most-populous nation.
The Auckland-based cooperative will trim 9 percent from its Anmum maternal health products in mainland China from next month "to better meet consumer needs in light of recent industry-wide price revisions," Fonterra president for Greater China and India, Kelvin Wickham, said in an emailed statement.
"We are committed to providing high quality, premium imported products to Chinese consumers and we are also committed to being an integral part of and long-term partner to the Chinese dairy industry," Wickham said.
The New Zealand firm joins Abbott Laboratories, Nestle, Danone, Royal FrieslandCampina and Mead Johnson Nutrition in cutting prices since the China National Development and Reform Commission launched its investigation.
Earlier this month, China's official publication, the People's Daily, reported the NDRC had evidence infant formula prices have climbed 30 percent since 2008. That was the year Fonterra was embroiled in the melamine scandal that left several infants dead after its farmers at its Chinese partner, San-lu, added melamine to the milk to lift its protein.
Since then, Fonterra has been boosting its exposure to Asian markets and China in particular as it looks to cash in on an increasingly wealthy population with growing demand for protein.
The company has been building farm hubs in China with a view to producing one billion litres of milk by 2020.
New Zealand is the biggest supplier of infant formula to China, selling 371,000 tons to the world's second-biggest economy, in the first half of the year, according to a People's Daily report.
China accounted for about a third of New Zealand's milk powder exports in the 12 months ended May 31, according to ANZ data.
Units in the Fonterra Shareholders' Fund fell 0.1 percent to $7.39 today, and have gained 5.2 percent this year.
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