6 foreign milk powder companies suspected of monopoly punishment 6.7 billion

Along the way, the smooth milk powder in the country is experiencing a price barrier in China. Under the pressure from the National Development and Reform Commission’s fines, the current situation of high domestic milk powder prices may end.

On August 7, the National Development and Reform Commission announced that six milk powder companies, including Hopson, Mead Johnson, and Dumex, had issued fines of about 670 million yuan for breaching antitrust laws and restricting competition. According to the reporter's understanding, the ticket is the largest fine in the history of China's anti-monopoly. Since 2008, the price of foreign milk powder has soared. The sky-high price bill undoubtedly sounded the alarm for foreign milk powder, and the price of milk powder has started to drop.

The biggest ticket
The price of foreign milk powder that has continued to soar has finally received due punishment.

According to statistics issued by the National Development and Reform Commission, a fine of 670 million yuan was levied on six milk powder manufacturing companies. Among them, Mead Johnson and Synergy were penalized for 4% and 6% of sales in 2012. The penalties were approximately RMB 203.76 billion and RMB 162.9 million respectively; Fonterra, Fosland, Abbott, and Dumex were each punished for sales in 2012. 3%. Wyeth, Bein, Meiji were exempted from punishment.

It is reported that both Synapse and Mead Johnson have stated that they will pay the fines issued by the National Development and Reform Commission in a timely manner and will not file an administrative lawsuit or defense.

Earlier this month, in early July, the National Development and Reform Commission confirmed to the media that it is conducting anti-monopoly investigations on prices of powdered milk products such as Synbiotics, and stated that there is evidence that the prices of these products in the Chinese market are high, and the price increase since 2008 is 30. About %, the price has been suspected of vertical monopoly.

Domestic brands do not give power, resulting in soaring foreign milk powder prices.

“If you don’t control prices, why is the price of foreign milk powder soaring? Reasonable market prices should have ups and downs.” The person in charge of a brand of domestically-produced milk powder who did not want to be named told this reporter bluntly that the price of foreign milk powder in recent years The increase was rapid. The cost of their raw materials was not that high. However, after the milk powder produced was shipped to China, the price was multiplied several times. It could be said that the profits were huge.

According to relevant data, the products of these brand products that were penalized have experienced an average price increase of more than 38% since 2008, and the maximum increase has exceeded 60%, with an average annual increase of 10%-15%.

What is the use of foreign milk powder suppliers to raise prices?

Most brands maintain the sales price for distributors. Most companies involved in the case stipulate the sales price of milk powder to dealers. If the distributors do not comply, they will fine the distributors and even directly control the rebates and stop the supply and control. Goods and so on. Another industry insider who declined to be named told reporters: "Some companies directly tell their employees that their price control behavior violates the anti-monopoly law and must be handled with caution. Do not communicate in writing and avoid leaving written evidence."

The industry sources told reporters that the foreign milk powder company not only stipulates the price of the market, but also stipulates the prices for all aspects of product sales. During this period, channel distributors have no say in the price of products, and they have to listen to vendors at all times.

Regarding the sky-high price bill issued by the National Development and Reform Commission, Zhao Ping, director of the Consumer Economics Research Department of the Ministry of Commerce, told the reporter that the companies that were punished had a monopoly on the market and abused the market’s dominant position, ultimately controlling the market’s price. In the fair market order, the NDRC imposes such a market ticket is very reasonable. The penalty is also a warning to these companies.

Mystery of milk powder is disillusioned

After the National Development and Reform Commission severely sanctioned a number of foreign milk powders, many foreign-funded milk powder companies cut prices.

On the evening of August 6, Fu Shilan issued a statement on its official website that it will cut the price of “Mesut Jiaer” milk powder on the Chinese market by 5% from July 8.

Responsible person of Fu Shilan stated that this price reduction is to fully cooperate with the NDRC's price supervision and investigation by the Anti-Monopoly Bureau. It will strengthen its own compliance and enforcement of price and China's anti-monopoly. The company will also conduct comprehensive training on anti-monopoly regulations.

In fact, Fu Shilan is not the first company to actively propose price cuts.

According to the statistics of the reporters, the number of investigated powdered milk products that have announced price cuts has reached four, including Wyeth milk powder, which claims that the maximum price reduction of single product amounts to 20%, with an average rate of reduction of 11%. Beinmei and Dumex only expressed their willingness to lower prices and did not disclose specific plans. .

Jin Bosong, a researcher at the International Trade and Economic Cooperation Research Institute of the Ministry of Commerce, said that after penalties, the prices of milk powder from these companies will gradually drop, and sales of domestic companies will be better, breaking price alliances and price monopolies among enterprises and favoring domestic Consumers will benefit from fair competition among dairy products companies.

On the other hand, the New Zealand dairy giants have recently exposed the quality door and for a time left the foreign milk powder in a dilemma. The person in charge of a large domestic dairy company told this reporter that the Fonterra incident will break the myth of Chinese consumers on foreign milk powder, making them discover that not only domestic milk powder is problematic, but also foreign milk powder is a problem. Milk powder safety has become global As for the topic, Chinese consumers will look more rationally at foreign milk powder, which will greatly benefit the image of domestic milk powder.

“The melamine incident in 2008 was a watershed for the development of China’s milk powder market.” Chen Yun, a member of the China Dairy Industry Association, told reporters that before this incident, in the high-end milk powder market, domestic brands and foreign milk powder were evenly divided. There were many regions, foreign milk powder. However, after the melamine incident, the situation began to change dramatically. As of now, in the high-end milk powder market, foreign brands should occupy more than 80% of the market share.

Foreign milk powder is falling down the altar, domestic milk powder brands can successfully counterattack?