Danone unit in China probes bribery claims
By Adam Jourdan, ReutersSHANGHAI -- Danone SA's advanced medical nutrition unit Nutricia has started an internal investigation after a Chinese newspaper published a report alleging it had bribed more than 100 doctors in Beijing to boost sales, the company said on Wednesday.
September 26, 2013, 12:05 am TWN
It was the third time in two weeks that a division of French food group Danone has had to respond to accusations of bribery by Chinese media, after its infant milk formula group Dumex was twice the subject of bribery allegations reported by China's state television.
China is a magnet for foreign milk powder makers, with a US$12.4 billion market that is expected to double by 2017. But foreign firms are under scrutiny after recent media reports alleging corrupt sales practices in the industry. Authorities last month also fined a group of mostly foreign milk powder producers US$110 million for price fixing.
Nutricia, which makes Karicare milk formula, bribed doctors at 14 hospitals in the Chinese capital with kickbacks, gifts, funded-travel and complementary show tickets between 2010 and 2013, the 21st Century Business Herald said on Wednesday, citing an unnamed whistleblower who claimed to be a student doctor.
The whistleblower had 52 documents detailing payments from Nutricia, the largest portion of which were to Beijing Aerospace General Hospital and Xuanwu Hospital Capital Medical University, according to the paper.
Nutricia had paid a sum of 300,000 yuan (US$49,000) to a dozen doctors at the two hospitals over a three-year period, it said.
“We only saw the report this morning, so we've only just started an internal investigation into the matter,” Zhao Qinghua, a spokeswoman for Nutricia in China, told Reuters.
“At the moment we still don't know the details ... We need to wait to see the outcome of the investigation before we can make our next plans.”
The two hospitals at the centre of the allegations did not immediately respond to telephone queries about the report.
Corruption in China's pharmaceutical industry remains widespread, fuelled in part by low base salaries for doctors at the country's 13,500 public hospitals.