China’s State Administration of Industry and Commerce said on its Web site Friday that it had started an investigation, but it offered few details about why it was looking into Tetra Pak, which makes food and beverage packages.
Christopher Huntley, a Tetra Pak spokesman, said Friday that this was the first time the government had formally investigated the company on antitrust grounds. Company executives were questioned several years ago about the matter and responded, he said. In 2005, a statement on the commerce agency’s Web site complained about Tetra Pak’s “monopoly” in the Chinese market and said it could take action.
The Tetra Pak announcement came just days after the National Development and Reform Commission, the powerful state planning agency, said it was investigating international producers of infant milk formula sold in China on suspicion of price-fixing and anticompetitive behavior.
The commission also said that it was reviewing the production and import costs of scores of Chinese and international drug makers operating in China, including some of the world’s biggest pharmaceutical companies. The review includes joint ventures set up by global drug companies like GlaxoSmithKline, Merck and Novartis.
“It is mandatory for pharmaceutical companies in China to report to the government pricing data as part of a routine process,” a spokesman for Sandoz China, a division of Novartis, said in a statement on Friday. “Sandoz China will cooperate with the authority to provide required information.”
Analysts say it is not unusual for the government to investigate the pricing practices of Chinese and international companies. Although most prices in China are set by market forces, the government maintains control over large parts of the economy, including energy and telecommunications prices, and likes to exert its influence.
The government closely monitors are health care costs, including the prices of certain types of drugs. With costs skyrocketing, the price of infant milk formula has recently become a growing concern in China, partly because of worries about the quality and safety of domestic brands.
In response to the government investigation, several international brands, including Nestlé and Danone, have announced price cuts — as much as 20 percent — on infant milk formula sold in China.
Separately, the police in the central Chinese city of Changsha said this week that they were investigating executives at the British pharmaceutical giant GlaxoSmithKline on suspicion of “economic crimes.” A report in The Wall Street Journal last month said a whistle-blower had sent information to the company’s board of directors claiming that for years the China sales staff at GlaxoSmithKline had engaged in “widespread bribery of doctors to prescribe drugs.”
A spokesman for Glaxo said the company had conducted an internal investigation and found no evidence of bribery or corruption in the China operation. The company said it was cooperating with the Chinese government but was unclear as to the nature of the investigation.
Article source: http://www.nytimes.com/2013/07/06/business/global/tetra-pak-comes-under-scrutiny-in-china.html?partner=rss&emc=rss