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Mead Johnson to Danone Threatened in China Price Probe

Chinese parents’ distrust of local milk has elevated foreign baby-food brands into luxury goods and allowed companies from Danone to Mead Johnson Nutrition Co. to fatten margins. Those plump profits are at risk.

The troubles started this month as state-controlled media reported China’s government was investigating them and other overseas competitors for possible price fixing. Within days, Danone and Nestle SA slashed some prices by as much as 20 percent. Mead Johnson, the country’s largest infant formula seller, announced its own cuts July 10.