Danone probes Chinese bribery allegations at baby-food unit Nutricia

Groupe Danone yesterday said that it will launch an internal investigation into bribery allegations at a second baby-food unit in China, just two weeks after Chinese media accused the French dairy major's Dumex unit of bribery.

Danone's advanced medical nutrition unit, Nutricia, started the investigation after Chinese newspaper The 21st Century Business Herald reported that the company had bribed more than 100 doctors in Beijing to increase sales.

Citing an unidentified student doctor, the paper said that Nutricia bribed more than 100 doctors at 14 hospitals in Beijing by offering kickbacks, gifts, funded travel and complimentary show tickets, and group activities like strawberry-picking between 2010 and 2013.

The bribes included a total of $50,000 to dozens of doctors at two hospitals, the report said.

The new allegations come two weeks after Chinese state media accused Danone's baby formula subsidiary Dumex, of bribing Chinese hospital staff with to 10,000 yuan each to promote its products.

Last month, Chinese regulators fined six overseas infant milk suppliers a total of $108 million for price-fixing and anti-competitive behaviour, as Beijing continues to scrutinise the business practices of foreign companies operating in the country

Mead Johnson was fined $33 million, Biostime $26.3 million, Dumex $27.7 million, FrieslandCampina $7.8 million, Abbott $12.5 million and Fonterra $720,000.

The fine comes amid probes underway on overseas pharmaceutical companies, including GSK, Merck, Baxter Healthcare and Sandoz, over price fixing of drugs and bribing doctors, hospitals and others.

Chinese regulators have also widened their probe to Switzerland-based food processing and packaging company Tetra Pak Group over alleged abuse of market dominance and stopped import of all milk powder from New Zealand over fears of botulism after its main exporter Fonterra discovered a strain of bacteria in some of its products that can cause the disease.