Danone food unit Nutricia has started an internal investigation into bribery claims in China.
A report in Chinese newspaper 21st Century Business Herald has alleged that Nutricia, maker of KariCare milk formula, bribed doctors to boost sales.
The report, which cited an unidentified person, claimed that the unit gave gifts and travel subsidies to more than 100 doctors in 14 hospitals in Beijing.
This is the second such allegation made against a Danone unit in recent weeks.
“At the moment we still don’t know the details,” Zhao Qinghua, a spokeswoman for Nutricia in China, was quoted as saying by the Reuters news agency.
“We need to wait to see the outcome of the investigation before we can make our next plans.”
A report in Chinese newspaper 21st Century Business Herald has alleged that Nutricia, maker of KariCare milk formula, bribed doctors to boost sales
Earlier this month a report on China Central Television alleged that Dumex, a baby food brand owned by Danone, bribed doctors to boost sales.
It was accused of giving “sponsorship fees” or payments of up to 10,000 yuan ($1,632) to hospital staff.
Dumex said it was “shocked” by the allegations and was investigating the claims.
The French food giant has also faced other problems in China this year.
Danone cut prices for its infant milk formula products by as much as 20% after China’s top economic planning body fined it in August for price-fixing.
The company also had to issue a precautionary recall of its milk formula products last month after one of its suppliers, Fonterra, said some items may have been contaminated.
Demand for foreign brands has surged in China, after tainted milk scandals in recent years led to a distrust of local producers.
According to some estimates, foreign brands now account for about half of all infant milk sales in the country.
However, foreign companies have come under scrutiny recently amid a government-led crackdown on corruption in the healthcare sector.
Dumex – Danone baby food unit – said it is investigating claims the company bribed hospital staff in China to use its products.
According to China Central Television, Dumex allegedly paid doctors and nurses in the northern city of Tianjin to promote its baby formula products.
The report, which cited an unidentified former sales manager, comes amid an anti-corruption drive by Beijing.
Dumex said it was “extremely shocked” by the allegations.
“Dumex Baby Food Co strictly adheres to Chinese laws and regulations,” a company spokeswoman said in a statement.
The latest allegations against Danone come amid a government-led crackdown on corruption in its $350 billion healthcare market.
Dumex allegedly paid doctors and nurses in the northern city of Tianjin to promote its baby formula products
Some inquiries have targeted foreign firms, including British pharmaceutical giant GlaxoSmithKline, which is being investigated for allegedly using inducements to promote the sale of its medicines.
In the CCTV report, Danone’s Dumex brand is accused of giving “sponsorship fees” or payments of up to 10,000 yuan ($1,632) to hospital staff.
The French food giant has faced numerous problems in China this year.
Danone cut prices for its infant milk formula products by as much as 20% after China’s top economic planning body fined it in August for price-fixing.
The firm also had to issue a precautionary recall of its milk formula products last month after one of its suppliers, Fonterra, said some items may have been contaminated.
China is an important market for companies such as Danone, which is the country’s third-largest baby formula provider.
Danone’s baby nutrition unit also makes more than 20% of its overall sales from China.
Demand for foreign brands has surged in China, after tainted milk scandals in recent years led to a distrust of local producers.
According to some estimates, foreign brands now account for about half of all infant milk sales in China.
French food and drink company Danone has announced it will cut 900 jobs after weakness in southern European economies hit sales.
The owner of Activia yogurt and Evian bottled water reported sales of 20.1 billion euros ($26.8 billion) in 2012, up 5.4% from a year earlier.
But sales in Europe fell 3% following a “severe deterioration” in consumer demand.
As a result, Danone has announced a cost-cutting plan.
The firm plans to cut about 900 management and administrative positions across 26 European countries.
“2013 will be a year of transition, with vigorous development in business in our growth markets and a drive to strengthen operations in Europe,” said chairman and chief executive Franck Riboud in a statement.
Danone has announced it will cut 900 jobs after weakness in southern European economies hit sales
The world’s biggest maker of yogurts predicted its profit margins would fall again this year, with a negative trend for demand in Europe and prices of raw materials staying high.
Its sales growth in 2012 was at the lower end of its own expectations and behind the 5.9% achieved by its Swiss rival Nestle.
Danone is heavily exposed to European economies, with about 38% of its sales coming from Western Europe.
Sales at its Spanish dairy division were particularly weak.
Danone announced in December that it was preparing a two-year cost-cutting programme to save about 200 million euros.
