Biostime International Holdings Ltd. halted trading of its shares pending the results of a probe by China’s top economic planning agency into milk-powder pricing that could come as early as today.
The company received notice that the results of the National Development and Reform Commission’s investigation would be released today or tomorrow and is preparing for the announcement, Jason Xu, Biostime’s assistant chief financial officer, said in a telephone interview today.
The probe into infant-formula makers for possible monopolistic practices, announced last month, has already prompted companies including Mead Johnson Nutrition Co., Danone and Nestle SA to cut prices for their products. Some companies have broadly admitted that their resale prices may have broke rules, the official Xinhua News Agency has reported, citing Xu Kunlin, head of the NDRC’s pricing supervision department. It didn’t say which producers admitted violations.
Abbott Laboratories and Royal FrieslandCampina NV were the others being probed on pricing. The overseas manufacturers set a minimum at which their products could be sold in China, leading to high prices, Xinhua reported July 31.
A July 2 article in the Communist Party’s official People’s Daily newspaper said the NDRC had evidence showing prices for foreign milk powder producers had increased about 30 percent since 2008, the same year milk powder contaminated with the chemical melamine killed at least six infants.