Mead Johnson Cuts Some Prices in China Amid Regulatory Probe

Mead Johnson Nutrition Co. (MJN) said it will cut prices of its main infant formula products after Chinese regulators began an investigation into suspected price-fixing by powdered-milk producers.

Mead Johnson will lower the price of its formulas in China by 7 percent to 15 percent and change its current promotional, marketing and sales plans, the Glenview, Illinois-based company said today in a statement.

Mead Johnson joins at least four other infant formula makers in cutting its prices after China’s National Development and Reform Commission, the country’s top economic planning agency, started an investigation into the pricing of milk powder. The Chinese agency said last week it had evidence milk-powder companies sold products at prices in China that have increased about 30 percent since 2008, when safety scares such as a melamine-tainted milk powder have been driving up demand for international brands, the official People’s Daily reported last week.

Infant-formula makers Nestle SA (NESN), Danone SA (BN), Royal FrieslandCampina NV and Abbott Laboratories (ABT) have said they will cut prices of their key products in China. Nestle and Danone said they will lower the prices of certain infant-formula products as much as 20 percent. Abbott Laboratories said it will cut prices 4 percent to 12 percent and FrieslandCampina said it will reduce prices 5 percent.

Photographer: Lam Yik Fei/Bloomberg

A pedestrian walks past Pfizer Inc. Wyeth Gold baby formula, from left, Royal FrieslandCampina NV FrisoMum formula, and Mead Johnson Nutrition Co. Enfamama A+ formula displayed outside a pharmacy in the Sheung Wan area of Hong Kong. Close

A pedestrian walks past Pfizer Inc. Wyeth Gold baby formula, from left, Royal... Read More

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Photographer: Lam Yik Fei/Bloomberg

A pedestrian walks past Pfizer Inc. Wyeth Gold baby formula, from left, Royal FrieslandCampina NV FrisoMum formula, and Mead Johnson Nutrition Co. Enfamama A+ formula displayed outside a pharmacy in the Sheung Wan area of Hong Kong.

“For the sake of the healthy development of the industry, and to reinforce the trust and support of Chinese consumers, the company will optimize its marketing and sales strategy and adjust current pricing and promotional plans,” Mead Johnson said.

Mead Johnson rose 3.8 percent to $72.95 at the close in New York. The company’s shares gained 11 percent this year.

To contact the reporter on this story: Shannon Pettypiece in New York at spettypiece@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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