Danone Paid China Medical Staff to Promote Milk, Government Says

Danone’s Dumex baby milk business made improper payments to medical workers in China’s northern city of Tianjin for promoting its infant formula, according to a statement by the local government.

An official investigation found that 116 employees in 85 medical institutions had broken rules since 2011 and accepted payments from the French infant formula maker, according to a post on the city’s official microblog today.

Athena Wang, Dumex’s Shanghai-based spokeswoman, couldn’t immediately comment on the government statement. Money received by the 116 medical staff would be confiscated, and 13 people who commited serious violations would be “severely” punished, the local government said.

The latest government statement comes after reports by state broadcaster China Central Television last month that Dumex made improper payments to medical staff in the country to boost sales. The government has sought to crack down on corruption in the country’s $350 billion health-care market, probing multiple drug companies amid claims of doctors’ involvement in malfeasance.

Dumex had given hundred of thousands of yuan annually in various forms of “sponsorship fees” to doctors and nurses in hospitals to sell its products amid fierce competition in the industry, CCTV reported last month.

Danone said last month its Nutricia China unit had started an internal probe into allegations of bribery at the business.

— With assistance by Liza Lin

Before it's here, it's on the Bloomberg Terminal.